[This post has been updated] In what is unquestionably the largest change in Canadian magazine publishing in many years, Trancontinental Inc. has announced it is selling 15 consumer magazines based in Montreal and Toronto to Quebec's TVA Group for $55.5 million. It includes all associated websites and related platforms. Key to the arrangement is that TC Transcontinental Printing would retain the printing of all affected magazines through 2022 in an extended contract with TVA.
The deal does not include the TC Media western properties such as Vancouver Magazine and Western Living.
Magazines and digital properties changing ownership would include Canadian Living, Style at Home, Coup de pouce, Elle Canada, Elle Québec, Decormag, Magazine, Magazine Véro, Fleurs plantes et Jardins, Quebec Green, Canadian Gardening, recettes.qc.ca, and The Hockey News. It means TVA assumes the 51% partnership share of Elle Canada and Elle Québec which it holds in partnership with Hearst Group. TVA Group and Bayard Group will each hold a 50% share in Publications Senior Inc., publisher of Le Bel Âge and Good Times magazines.
Subject to Competition Bureau approval, the change, which will have unknown effects on the jobs of 310 people. would see the titles of TC Media (English Canada's largest consumer magazine publisher) with TVA, which is the largest magazine publisher in Quebec.
Francoise Olivier, the president and chief executive officer said the company is going to concentrate on local advertising, through its greatly expanded stable of more than 180 newspapers in Quebec, Ontario, Saskatchewan and the Atlantic provinces.
"In the context of the highly competitive magazine industry that is experiencing a proliferation of platforms and generated content as well as migration of advertising revenue towards digital media, Transcontinental Inc. has decided to sell its consumer magazines in Montreal and Toronto to the TVA Group whose platforms will enable the continued evolution of these magazines," he said.
"Today's agreement creates twofold value for Transcontinental Inc., In one stroke we have also improved the book of business for our printing sector."Transcontinental Inc. which includes four divisions (TC Transcontinental, TC Media, TC Transcontinental Printing and TC Transcontinental Packaging) had revenues of $2.1 billion in 2013.
TVA is the television and media arm of Quebecor Media. The company said in a release it expects annual revenues of $10 to $14 million from the newly acquired magazines.
"Print media is facing growing competition from digital media and new technological platforms," noted Pierre Dion, president and CEO of Quebecor and Quebecor Media. "And bear in mind that the competition notably comes from increasingly powerful foreign players. In this landscape, print magazines, just like newspapers, need to be consolidated to ensure these traditional media survive and allow them to compete with digital media."
"This acquisition is in line with the Corporation's strategy of investing in the production and distribution of high-quality, rich, diverse entertainment and news media content," said Julie Tremblay, president and CEO of Media Group and TVA Group. "We are therefore very pleased to acquire these strong brands, which are amongst the most popular magazine titles in Canada, and complementary to those of TVA Publications titles."
"TVA Group has extensive experience in magazine publishing. This transaction will enable us to capture significant operational synergies and secure the segment's long-term profitability and viability. We anticipate that after these magazines are acquired they will contribute between $10 million and $14 million to operating earnings annually," concluded Julie Tremblay.