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German publisher Bauer Media has expanded its magazine empire to include iconic publications Better Homes & Gardens and Marie Claire AU.
The company has acquired the Pacific Magazines business from Seven West Media (ASX: SWM) for $40 million, representing a 4.9x EBITDA multiple based on the 2019 financial year.
The sale will see SWM maintain a relationship with Pacific Magazines that is to mutually benefit both parties, including advertising spend commitments, the ongoing production of the Better Homes & Gardens television programme, and the sharing of lifestyle content.
In addition, SWM will receive $6.6 million of advertising on Bauer Media assets over three years.
This is the third transaction conducted by SWM this week, following last Friday's $65 million merger with Prime Media and the $28 million divestment of its Western Australian radio business Redwave to Southern Cross Austereo.
SWM MD and CEO James Warburton says the divestment of Pacific Magazines is in line with the company's ongoing transformation.
"The sale of Pacific Magazines is another major initiative aligned with our strategy to improve balance sheet flexibility and simplify the operating model to enable greater focus on growth initiatives," says Warburton.
"The team at Pacific have been at the forefront of our groups transformation and have done a tremendous job at repositioning their business, but there can be no doubt that there is a greater future within a larger scaled magazine group."
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