Harcourt to Buy Mosby From Times Mirror
Harcourt General Inc. on Wednesday agreed to buy Times Mirror Co.’s Mosby Inc. for $415 million in cash, boosting its presence in the fast-growing health-publishing industry.
Mosby’s publications, which are concentrated in the fields of nursing and allied health, include 3,000 books and 100 periodicals distributed in 41 countries and have annual revenue of $225 million. The acquisition is expected to lower Harcourt’s profit by 10 cents to 15 cents a share in the first 12 months.
The move comes as Harcourt tries to bolster its science, technical and medical publishing business. The category is a growing part of the company’s Harcourt Brace & Co. publishing unit, which already has 3,300 medical book titles and 230 periodicals. The unit has annual sales of about $1.8 billion.
“The strategic review of the health-sciences publishing marketplace that we began last fall led us to conclude that the future growth of Mosby would be best achieved if it were part of a global health-sciences publisher,” said Mark H. Willes, Times Mirror chairman, president and chief executive officer.
Times Mirror has been shedding many of its publishing units to focus on newspapers such as the Los Angeles Times and Baltimore Sun and smaller businesses such as classified-advertising shoppers.
Last month, Times Mirror sold its legal publishing operations--Matthew Bender & Co. and a half-interest in Shepard’s Co., a legal citation service--to Reed Elsevier for $1.65 billion in cash. Reed Elsevier already owned the other half of Shepard’s.
Times Mirror has said it would use proceeds from the sales to pay debt and buy back stock.
The Los Angeles-based company said it would report a gain of $195 million, or $2.05 a share, when the transaction is completed.
Times Mirror shares rose 31 cents to close at $62.19 on the New York Stock Exchange. Chestnut Hill, Mass.-based Harcourt fell 81 cents to $52.31, also on the NYSE.
The purchase should enable Harcourt General to cut costs by combining some back-office operations, sales forces and other operations, said Peter Appert, an analyst at BT Alex. Brown Inc.
