The sale of New Scientist magazine is seen as good news for Relx, an Anglo-Dutch company that has moved from print to online delivery of information in the past 20 years.
The FTSE 100 company was once known as Reed International, and owned paper making and building materials companies such as Crown Paint and Polycell. It then bought IPC Magazines and book publishers and switched its focus to publishing. In 1993, it merged with Elsevier, a Dutch group, to concentrate on academic and professional publishing.
Reed Elsevier sold off both the consumer books and IPC’s consumer magazines, which were seen as low-margin businesses, to concentrate on digital delivery of data and information to academia and business. It held on to trade and business magazine titles, such as Variety and New Scientist, but has spent the past 10 years selling these to invest in digital assets such as Lexis Nexis.
Now, New Scientist has been sold to Kingston Acquisitions, an investment firm led by Sir Bernard Gray. He was part of the £230m buyout of the Times Educational Supplement from News Corp in 2005 by private equity group Exponent. Hopefully, a third of the company’s staff won’t take up an offer of voluntary redundancy, as happened after that deal.
The recent history of Relx and Pearson makes a fascinating comparison. Both were conglomerates in the 1980s that decided to concentrate on publishing and media. However, Pearson always seemed a decade behind Reed. That gap has accelerated since Marjorie Scardino left Pearson. New MD John Fallon has seen Pearson’s share price fall by half in the past five years, while Reed’s has more than doubled. The big mystery is how Fallon has kept hold of his job.