M&A

Mondadori Group: agreement signed on the acquisition of 51% of Edizioni Star Comics

The Mondadori Group announces that it has signed an agreement today on the acquisition of a 51% stake in Edizioni Star Comics S.r.l., Italy’s leading comic books publisher, specialized in the publication on the domestic market of the major international productions including, in particular, Japanese manga.

The acquisition, fully consistent with the repeatedly-announced strategy to strengthen the core business of books, allows the Mondadori Group to secure a leadership position in the domestic comic books segment, the most thriving area in the publishing industry, boasting a 175% growth over the three-year period 2019-2021 and 30% in the first 4 months of 2022 (figures in terms of value, source AIE Research Office on Nielsen Bookscan data).

“Over the past few years, the Comics segment has become an important lever of development for the entire books chain, thanks also to the high innovation rate of the publishing offer and the extraordinary ability it has to attract new readers: Star Comics stands as the undisputed leader in this segment” – said Antonio Porro, CEO of the Mondadori Group.
“The exchange of expertise between our group and a publisher such as Star Comics, whose people have been able to build a recognized and consolidated leadership over time, enhanced by a strong relationship with its audience, will be interesting and fruitful”, ended Porro.

The activities of Edizioni Star Comics can find further opportunities for growth within the Mondadori Group, thanks to the synergies generated by the deal, including, in particular, access to the most extensive network of bookstores in Italy, where Mondadori Retail is developing spaces specifically dedicated to the comics product.

The acquisition of a 51% stake in the share capital of Edizioni Star Comics was defined on the basis of an Enterprise Value (for 100% of the company) of € 28 million: the price, which will be paid in full in cash at closing, will be subject to final adjustment based on the net financial position at the closing date.

The defined agreements also envisage the underwriting of call option contracts, which give the Mondadori Group the right to acquire the remaining 49% stake in Edizioni Star Comics, exercisable in two equal tranches starting from the approval of the 2024 and 2027 financial statements, respectively, at a price to be set on the basis of the average EBITDA of the relevant previous three years. Should Mondadori fail to exercise the call options, the agreements govern put options in favour of the sellers exercisable under the same price conditions.

In 2021, Edizioni Star Comics recorded strong growth in results versus the prior year: revenue of        € 21.6 million, EBITDA of € 7.2 million, net profit of € 5.1 million and a positive net financial position (cash) of € 4,3 million.

Under the deal, Simone Bovini and Claudia Bovini – who founded and have so far successfully managed Edizioni Star Comics, bringing it to its leading role in the Italian comic books market – will retain management responsibilities and continue to serve as managing directors of the company.
The scope of the transaction also includes the acquisition of 100% of Grafiche Bovini S.r.l., a company controlled by the same family of founders, specialized in printing activities exclusively of products published by Edizioni Star Comics.

The transaction is expected to close by 30 June 2022, and is conditional, inter alia, upon the spin-off of the property component as well as the consent of the Japanese and Korean licensors who own the rights to some of the company’s publications.
Any impact on guidance for the current year, which has already been disclosed to the market, will be announced on completion of the transaction.

Mondadori Group: conclusion of the acquisition of 50% of A.L.I. – Agenzia Libraria International

The Mondadori Group announces the conclusion today, through its subsidiary Mondadori Libri S.p.A., of the acquisition of 50% of A.L.I. S.r.l. – Agenzia Libraria International, a company operating in the distribution of books and boasting a client portfolio of over 80 publishers. The transaction takes place in execution of the agreement signed and disclosed to the market last 11 November 2021.

Thanks to this acquisition, the Mondadori Group takes a further step along the path of increasing focus on the books market, through a process of vertical integration that allows the Group to strengthen its position in the promotion and distribution of third-party publishers, with a view to continually improving the service level and expanding the customer portfolio.

As already disclosed, the scope of the transaction includes a number of subsidiaries operating in the publishing field.
The acquisition price, paid in cash on today’s date, is € 10.8 million.

The 50% stake in A.L.I. will be consolidated at equity effective as from 1 May 2022.

The final agreements envisage the acquisition by the Mondadori Group of a further 25% stake in A.L.I., effective as from 28 February 2023, at a price to be set based on average EBITDA 2021-2022. As from 1 March 2023, the company will be then fully consolidated.

The deal also governs the subscription of put&call options, which give Mondadori the right to acquire the remaining 25% of A.L.I. by 30 July 2025 at a price to be set based on average EBITDA 2023-2024.

The members of the Belloni family, the founders of A.L.I., will keep their roles of responsibility in the operational management of the company.

The closing of the acquisition follows the authorization by the competent Antitrust Authority, disclosed on 7 March 2022.

Mention should be made that the 2022 guidance (in particular the estimated Free Cash Flow), disclosed on 16 March, included the financial effects of the above transaction.

 

 

Mondadori Group: Antitrust gives go-ahead to acquisition of 50% of the books distribution company of third-party publishers A.L.I. – Agenzia Libraria International

The Mondadori Group announces that it has received notice from the Antitrust Authority of the authorization to acquire – as disclosed last 11 November 2021 – a 50% stake in A.L.I. S.r.l. – Agenzia Libraria International, specialized in the distribution of books.

Following authorization from the above Authority, the transaction will be fully implemented on the closing date, which is scheduled to take place by April.

Mondadori Group: Antitrust gives go-ahead to acquisition of De Agostini Scuola

The Mondadori Group announces that it has received notice from the Antitrust Authority of the authorization to acquire 100% of De Agostini Scuola S.p.A. as disclosed last 12 July.

The provision envisages the adoption of appropriate behavioural measures, as indicated by the Authority and shared by the Mondadori Group, to safeguard the competitiveness of the school textbooks market, including, in particular, the commitment to continue to keep De Agostini Scuola separated until 31 December 2024.
These remedies confirm the rationale of the acquisition, the business development plan and the potential for value creation initially estimated by the Group.

“We are really delighted to be able to go ahead with the acquisition of De Agostini Scuola, a deal consistent with our strategy of focusing on our core business of books”, said Antonio Porro, CEO of the Mondadori Group. “The investment – the most relevant made in the last 15 years – will allow us to open up a new chapter in the path of growth of our Group and to achieve a leadership position in the school publishing market”, concluded Porro.

The Authority’s go-ahead triggers the fulfilment of the suspensive condition attached to the agreement on the sale of the investment in De Agostini Scuola; the sale will therefore be fully executed on the closing date, scheduled to take place later this year.

Mondadori Group: agreement signed for the acquisition of De Agostini Scuola

The Mondadori Group announces the signing today of an agreement with De Agostini Editore S.p.A. – following the negotiations disclosed on 1 July – for the acquisition of 100% of De Agostini Scuola S.p.A., one of Italy’s top school textbook publishers.

The company’s products are targeted to every level of education – with a marked presence especially in the secondary school segment – through a series of brands including DeA Scuola, Petrini, Marietti Scuola, UTET Università, Cideb-Black Cat and Garzanti Scuola.

The transaction is consistent with the strategy – repeatedly announced by Mondadori – of focusing on the core business of books, in which the Group boasts a longstanding leadership in Trade and is one of the top school textbook players. The acquisition will enable the Company to further strengthen its foothold in the school textbook field, where it currently operates through the publishing houses Mondadori Education and Rizzoli Education.

The value of the transaction has been defined on the basis of an Enterprise Value of € 157.5 million, equal to 7.4 times the reported EBITDA recorded by De Agostini Scuola in 2020. The price will be defined on the basis of the average normalized net financial position over the 12 months before the closing date.

De Agostini Scuola posted in 2020 revenue of € 70.8 million, reported EBITDA of € 21.4 million, with a margin of 30%, and net profit of € 12.2 million. At 31 December 2020, the net financial position stood at a positive (net cash) € 20.8 million.

The agreement, which also makes all of the brands currently covering De Agostini Scuola’s school textbook publishing market available to the Mondadori Group, includes the typical representations and warranties for the purchaser.

The consideration for the transaction will be settled in cash at the closing date by drawing on the acquisition-related line of credit, recently defined as part of the loan agreement signed by the Group on 12 May.

Completion of the transaction is subject to the authorizations of law from the competent Antitrust authority.

Mention should be made that the forecasts developed for the current year on the Mondadori Group, previously disclosed to the market, have been prepared on the basis of the current scope; any updates to the above estimates will be announced with a view to the time required to complete the transaction.

The Mondadori Group Management will meet with the financial community at a conference call scheduled today at 6pm. The relevant presentation will be available on 1info (www.1info.it) and on the website www.gruppomondadori.it (Investors section).

Mondadori Group: negotiations underway for the possible acquisition of De Agostini Scuola

With regard to the news reports published today, the Mondadori Group hereby informs that negotiations are underway for the acquisition of 100% of De Agostini Scuola S.p.A., a school textbooks publisher owned by De Agostini Editore S.p.A..

The ongoing process, which follows the acceptance of a binding offer, envisages the signing of the contract subject to the successful outcome of further important stages, such as the sharing between the parties of specific contractual terms being discussed and the positive completion of confirmatory due diligence activities by the Mondadori Group.

The transaction would be consistent with the repeatedly announced strategy of focusing on the core business of books, in which the Mondadori Group boasts a longstanding leadership in Trade and is one of the top school textbooks players.

Completion, if any, of the transaction will be promptly disclosed to the market and would be subject to the authorizations of law by the competent Antitrust authority.

Closing of sale of Mondadori France to Reworld Media

Arnoldo Mondadori Editore S.p.A. announces the finalization today of the sale of its subsidiary Mondadori France S.A.S. to Reworld Media S.A. in execution of the agreement signed and disclosed to the market last 19 April.

Following this transaction, the Mondadori Group completes a further phase on the path of strategic repositioning, with increased focus on the Books Area and the development of new areas of business.

The consideration from the transaction amounts to € 70 million (cash free/debt free), plus an earn-out of € 5 million, according to the terms disclosed last 24 July.

Concurrent to the completion of the sale of Mondadori France, Arnoldo Mondadori Editore S.p.A. today repaid in full the Credit Line B of € 100 million, stipulated on 22 December 2017 with a pool of three banks (Banca Popolare di Milano S.p.A., Intesa San Paolo S.p.A. and Unicredit S.p.A.) as part of the loan agreement expiring in December 2022.

Antitrust clearance received for sale of Mondadori France to Reworld Media

Arnoldo Mondadori Editore S.p.A. announces that today the sale of its subsidiary Mondadori France S.A.S. to Reworld Media S.A. has received clearance from the Autorité de la Concurrence.

In accordance with the remedy set out in the clearance, Reworld Media undertakes to sell a title of its choice that could be either L’Auto-Journal, published by the joint venture EMAS (Editions Mondadori Axel Springer), or Auto Moto, published by Reworld Media.

In this context, as an update to the announcement made last 18 February, the parties have agreed to supplement, as indicated in point (iii), the structure of the consideration from the transaction, which remains – as expected – of € 70 million (cash free/debt free), also adding an earn-out of € 5 million:

  • 86% of the value of the investment – equal to € 60 million – will be paid in cash, € 50 million of which at the closing date, and € 10 million 24 months from the closing date; the deferred payment is not subject to any condition;
  • the remaining 14% of the value of Mondadori France S.A.S., equal to a nominal value of € 10 million, will be paid through issue of no. 3,558,718 Reworld Media S.A. shares, to be subscribed by Arnoldo Mondadori Editore S.p.A. at a price equal to € 2.81 per share;
  • Arnoldo Mondadori Editore S.p.A. additionally undertakes to subscribe – in the period from the closing date to 31/1/2020 – to a capital increase for a maximum amount of € 12.6 million in Reworld Media shares, at a price equal to the average of the closing trading price over the 20 days prior to the date of approval of the capital increase.

Following the subscriptions, Arnoldo Mondadori Editore S.p.A. is expected to hold an investment between 14% and 16% in Reworld Media S.A ; the estimated improvement in the Mondadori Group’s net financial position will be approximately €63 million, up versus the announcement made last 19 April.

As already disclosed to the market, completion of the sale is subject to the fulfilment of two conditions precedent:

  • approval of the reserved capital increase by the shareholders of Reworld Media (referred to in point ii);
  • provision of a bank loan, already authorized, to Reworld Media.

Agreement signed on sale of Mondadori France to Reworld Media

Arnoldo Mondadori Editore S.p.A. announced today that, following the procedure to inform and negotiate with the French trade unions as set out by law, it has signed an agreement on the sale of its subsidiary Mondadori France S.A.S. to Reworld Media S.A..

The agreement is in line with the Mondadori Group’s strategy to continue along its strategic repositioning path, placing increasing focus on the more profitable core businesses.

The scope subject to sale includes the 100% interest in the share capital held by Arnoldo Mondadori Editore S.p.A. in Mondadori France S.A.S. and its subsidiaries and/or investees.

The consideration for the transaction amounts to € 70 million (cash free/debt free), plus an earn-out of € 5 million to be paid according to the terms disclosed to the market on 18 February 2019.

As a result of the deal, Arnoldo Mondadori Editore S.p.A. will hold from an 8% to 10% interest in the share capital of Reworld Media S.A..

If the transaction is completed, the estimated improvement in the Mondadori Group’s net financial position at closing date would be approximately € 59 million.

As already disclosed to the market, completion of the transaction is subject to the fulfilment of the following conditions precedent:

  • authorization by the Autorité de la Concurrence;
  • approval of the reserved capital increase by the shareholders of Reworld Media;
  • provision of a bank loan, already authorized, to Reworld Media.

Mondadori Group: put option written as part of plan to sell Mondadori France to Reworld Media

Following today’s meeting of the Board of Directors of Arnoldo Mondadori Editore S.p.A., chaired by Marina Berlusconi, the Chief Executive Officer of the Mondadori Group, Ernesto Mauri, signed a put option, whereby Arnoldo Mondadori Editore S.p.A. has guaranteed itself the right to sell its subsidiary Mondadori France S.A.S. to Reworld Media S.A..

The disposal plan is part of the Mondadori Group’s repositioning strategy to place greater focus on the Books Area, and involves 100% of the stake held by Arnoldo Mondadori Editore S.p.A. in Mondadori France S.a.S. and the relating investments (revenue of € 330 million and EBITDA of € 18.4 million recorded in 2017).

The value for Mondadori France has been set at € 70 million (cash free/debt free), plus an earn-out of € 5 million.

Under the terms for exercising the put option:

  • 86% of the value of the investment – € 60 million – will be paid in cash, € 50 million of which at the closing date and € 10 million 24 months from the closing date; the deferred payment is not subject to any condition;
  • the remaining 14% of the value of Mondadori France S.A.S., for a nominal value of € 10 million, will be paid through issue of new Reworld Media S.A. shares, to be subscribed by Arnoldo Mondadori Editore S.p.A. at a price equal to 112.5% of the average stock market price over the 20 days before the signing and, in any case, ranging from a floor of € 2.2 to a cap of € 2.9.

Following the subscription, Arnoldo Mondadori Editore S.p.A. would hold from an 8% to a 10% interest in the share capital of Reworld Media S.A..

The transaction envisages a price adjustment mechanism linked to the achievement of pre-established targets relating to 2018 adjusted EBITDA and normalized net working capital at the closing date.

The earn-out to Arnoldo Mondadori Editore S.p.A. will be subject to the achievement in 2020, by Reworld Media S.A. in the new set-up, of certain financial results.

Under the terms for exercising the put option, Arnoldo Mondadori Editore S.p.A. is also required to provide the buyer with the usual representations and warranties.

If the deal is finalized, the Mondadori Group’s net financial position is expected to improve by approximately € 58 million at the closing date, considering: financial payables to third parties in Mondadori France (approximately € 7 million); fair value adjustment of Reworld Media shares subscribed by Arnoldo Mondadori Editore S.p.A. at closing (approximately € 3 million calculated to date); transaction costs of € 2 million.

In the financial statements for the year ended 31.12.2018, the result from discontinued operations, including impairment, is expected to be basically in line with the amount recorded in the Interim Management Statement at 30.09.2018.

Pursuant to the provisions of law, Mondadori France S.a.S. will start negotiations with its union representatives.

If the put option is exercised, the parties will sign a purchase and sale agreement envisaging completion of the transaction if the following conditions precedent are met:

  • authorization issued by the Autorité de la Concurrence;
  • approval of a reserved capital increase by the shareholders of Reworld Media;
  • disbursement of a bank loan to Reworld Media.