Hope of an economic turnaround fueled mergers and acquisitions in the first half of 2002, but when a rebound failed to materialize in the second half of the year, deal-making activity slowed considerably.
PPR reported 19 deals in the first six months of the year but only 10 since July. Of those 10, five were divestitures of publishing assets by larger publishing companies.
"Across the board, the first six months (of 2002) were more than active than the second," said Baran Rosen of Whitestone Communications (New York), a mergers and acquisitions advisory firm. "We saw a rebound from 9/11. There was increased optimism that the economy was coming back. People who are optimistic about the future will make acquisitions. But we had a letdown as the economy didn't come back as we expected."
The largest deal of the year took place in October—the management-led buyout of Kluwer Academic Publishers (Dordrecht, The Netherlands) from Wolters Kluwer for $531.5 million.
"I don't think the Kluwer Academic divestiture is a sign of a broad trend," Rosen said. "It's a sign just within the area of scientic pulbishing that the smartest minds at Kluwer assessed the potential of growth journals and they don't think it's a growth market. (Other publishers) probably assumed it didn't have good enough potential either."
This is an excerpt from an article from Professional Publishing Report; December 31, 2002
