Reed Elsevier announces binding offer to acquire MediMedia’s European and US Netter professional medical publishing businesses

Reed Elsevier announced today that it has made a binding offer to acquire MediMedia's European and US Netter professional medical publishing businesses (MediMedia MAP) for Eur270 million in cash, subject to the necessary regulatory clearances.

The acquisition of MediMedia MAP would be an important next step in Reed Elsevier’s strategy of building a leading global healthcare business in long term growth markets. It is a high quality business that fits extremely well within the Elsevier Health Sciences division.

MediMedia MAP is a leading provider of medical information in fast growing international healthcare markets, with its principal operations in France, Spain and the US as well as activities in the UK, Italy and Mexico. MediMedia MAP has highly successful brands in its markets and outstanding content. Publishing through the highly regarded imprints of Masson, Doyma and Netter amongst others, MediMedia MAP provides medical books and journals and reference information principally for the practioner market as well as continuing medical education and pharmaceutical industry sponsored communications. The world renowned Netter collection of medical illustrations is sold in over 200 countries.

The geography and publishing programmes of the MediMedia MAP businesses fit excellently within Reed Elsevier’s specialist health sciences group, Elsevier Health Sciences International. MediMedia MAP will bring Elsevier an extended footprint in France, Spain, Italy and Mexico as well as significant new content. The combination of the two businesses will accelerate growth with expanded publishing programmes and digital services, serving the growing medical and allied healthcare professions and their evolving needs for greater productivity and in meeting the increasing trend for structured continuing education.

The MediMedia MAP businesses saw revenues of Eur101 million and proforma EBITDA of Eur16 million in 2004. The focus on new publishing and marketing opportunities and the benefits of shared operations and sales and digital expertise are expected to build revenue growth to around 7-8% per annum in the second year post acquisition and to significantly improve profitability. The acquisition is expected to be accretive to adjusted earnings from the outset, and to generate post tax annual returns in excess of 8% within three years, covering Reed Elsevier’s cost of capital, and to continue to grow returns strongly thereafter. Elsevier’s Health Sciences International business outside the US had revenues of US$414 million in 2004 and is budgeted to deliver organic growth of at least 7% in 2005.

Commenting on the transaction, Elsevier’s CEO Erik Engstrom said: "We are very excited by the opportunities presented by an acquisition of MediMedia MAP. It is a business showing strong growth potential, with prestigious brands and content. We look forward to continuing to invest in the respected French, Spanish, and Italian medical publishing traditions of Masson and Doyma, as well as developing the potential of the successful Netter business. The combination of our two successful businesses will provide all our customers with expanded resources to contribute further to their professional success."

Reed Elsevier Group plc is a world leading publisher and information provider. It is owned equally by its two parent companies, Reed Elsevier PLC and Reed Elsevier NV. The parent companies are listed on the London, Amsterdam and New York Stock Exchanges, under the following ticker symbols: London: REL; Amsterdam: REN; New York: RUK and ENL. In 2004, Reed Elsevier made adjusted profit before taxation of £1,027 million/Eur1,510 million on turnover of £4,812 million/Eur7,074 million. The group employs 35,600 people, including approximately 22,000 in North America. Operating in the scientific, legal, educational and business-to-business sectors, Reed Elsevier provides high value and flexible information solutions to professional end users, with increasing emphasis on internet delivery.