Bertelsmann will have a $8 billion warchest with which to make digital (and other kinds of) media acquisitions through to 2010. Announcing annual figures, Europe’s largest media company said profit more than doubled in 2006. Now it is dropping a self-imposed ban on acquisitions (introduced to cut debt resulting from the buy-back of a 25 percent stake), and is focused on buying itself success in the new media ecosystem. The cash will be free from next year, if debt falls as expected.
- CFO Thomas Rabe: “We will again have financial scope of between $1.6 billion and $2 billion per year for acquisitions and $935 million for other ongoing investments”.
- Times: “Gunther Thielen, the company’s outgoing chief executive, said that there were no obvious gaps in Bertelsmann’s existing divisions. However, the company wanted to target fresh assets that ultimately it could integrate. When pressed to clarify target areas, he said that it was difficult to identify which new-media businesses would be sustainable: ‘Those who are too early will be punished and so will those who are too late.’”
Bertlesmann will not target telecoms infrastructure providers, however, according to Reuters.
Ten percent of the acquisition budget will go toward a private equity fund that will target media companies and is joined by Citigroup Private Equity and Morgan Stanley Principal Investments. Amongst Bertelsmann’s boldest online acquisitions was its failed purchase of Napster in 2002. Whilst the group has effective television, magazine and book divisions, it is seen as needing to up its game on the net once more.
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- Bertelsmann’s New Web-Friendly CEO; Deals Coming?