Magazine publisher Future agrees deal to buy the owner of price comparison site Go Compare for £594m
- Insurance mogul and GoCo chair Sir Peter Wood could net £50m from the deal
- Future also produces FourFourTwo, ProCycling, and Horse & Hound magazines
- Shares in the Bath-based firm have shot up over twentyfold in the last six years
Magazine publisher Future plc has agreed to buy the parent company of the Go Compare website in a cash plus shares deal worth almost £600million.
Directors for the Total Film publisher recommend shareholders back the offer, which it says will enable them to access the GoCo Group’s technology and knowledge of the price comparison market.
It would also take control of energy savings services Look After My Bills and Weflip, as well as discount voucher platform MyVoucherCodes as part of the deal.
Aside from Go Compare, GoCo Group also runs energy savings service Look After My Bills
Insurance mogul and GoCo chairman Sir Peter Wood meanwhile is expected to receive a huge payday from the £594million acquisition that could net him about £50million.
Future’s chairman Richard Huntingford said the new deal would enable it to benefit from ‘the growing consumer demand for informed and value-driven purchasing decisions enabled by intent-driven content, which will deliver strong returns for all shareholders.’
The Country Life owner has been on a buying frenzy in recent years, swallowing up brands like football monthly FourFourTwo, ProCycling sport magazine and Horse & Hound publisher T.I. Media earlier this year.
This followed a difficult period when it closed titles and slashed jobs as it sought to diversify into a major digital media operation.
Under the leadership of Zilla Byng-Thorne though, its financial performance has been strong as its portfolio has expanded dramatically and the Bath-based business has seen its share price shoot up by over twentyfold in the last six years.
Shares plunged 14.8 per cent to £16.72 by mid-afternoon despite the group, which produces more than 115 magazine titles such as Marie Claire UK and Ideal Home, also reporting impressive annual results.
After it acquired TI Media this year, Future plc became the publisher of Country Life magazine
Its revenues jumped 53 per cent to £339.6million in the year to September 30 while pre-tax profits rose 309 per cent to £52million.
Its online audience expanded by nearly half to 281.8 million, helping income from e-commerce and digital advertising to make up for the significant losses from the cancellation of events due to the coronavirus pandemic.
‘The long-term fundamentals of growing global digital advertising spend and eCommerce growth add to our confidence that, despite continued market uncertainty, we remain well-positioned to continue our strong growth,’ remarked Byng-Thorne.
Overall organic earnings also increased by 6 per cent despite store closures causing the magazine division to experience a 29 per cent decline, with the second six months of the year seeing a 45 per cent drop.
Future plc publishes monthly fashion magazine Marie Claire UK. The latest November issue has actresses Scarlett Johansson (L) and Florence Pugh (R) on the cover
Content published by Future now reaches over a third of UK and US adults, having put more than £50million of investment into it over the last year. Furthermore, they are creating 150 new jobs in editorial, video and engineering.
Hargreaves Lansdown equity analyst Nicholas Hyett said: ‘Given the attractions, it’s not a surprise that someone’s come knocking for the group, especially given the recent flurry of M&A activity in the UK.
‘The premium looks reasonable to us too. However, the fact it’s Future that’s got the chequebook out is rather baffling.’
He believes the deal benefits GoCo shareholders, but he warns that ‘what it offers Future investors is less clear,’ and that the publisher ‘has its work cut out to prove the deal adds up.’