Wolters Kluwer acquired MCFER holding for €40 million

One of the leaders in the European b2b publishing market, the Dutch Wolters Kluwer, yesterday announced the acquisition of 55% of the Russian holding International Center for Financial and Economic Development (ICFED). MCFR publishes the popular magazines “Tax Disputes” and “Schoolchildren’s Health” and is one of the three largest domestic b2b publishing houses.

A message appeared on the Wolters Kluwer website yesterday that the company had signed an agreement to purchase 55% of the International Center for Financial and Economic Development, which publishes professional publications in the management, tax and accounting fields. "Wolters Kluwer has the right to purchase the remaining 45%," the statement said. According to MCFER General Director Maxim Mezhansky, the deal included publishing and educational businesses, and MCFER-Consulting remained with the previous shareholders. Wolters Kluwer already has a division in Russia - it publishes specialized books (revenue is “several million dollars”).

ICFER has three main directions: publishing (magazines, books), educational (seminars, conferences and forums) and consulting. Turnover in 2007 will be, according to its own data, €45 million. The owners are the company's managers, including its general director Maxim Mezhansky.

A source close to the deal told Kommersant that the entire MCFER was valued at €80 million and the controlling stake cost Wolters Kluwer a little more than €40 million. Prof-Media Investment Director Sergei Tikhonov believes that the company with a turnover of €45 million the b2b segment could cost more than €100 million, “if they were more transparent and more structured.” The general director of the b2b publishing house Aktion Media, Sergei Panov, noted that the risk may lie in the fact that “some of the ICFER publications are published under the patronage or on order of various government departments.” “In any case, this is the largest transaction in the b2b segment,” says Mediamark CEO Konstantin Isakov. “Until now, Western players of this profile have not entered Russia through acquisitions.”

Wolters Kluwer (headquartered in Amsterdam) publishes books, produces software and databases in the fields of law, finance, healthcare, etc. It works for clients in 18 countries in Europe, North America, and Asia. Revenue for the first half of 2007 - €1.677 billion. Capitalization on Euronext Amsterdam - €6.6 billion.

According to Sergei Panov, Wolters Kluwer is going to increase its capitalization by entering another developing market. “A significant presence on it can only be ensured by the acquisition of a major player,” he said. “And MCFR is one of the three leaders (the other two are the Aktion Publishing House, merged with the Status Quo Publishing House, and the Berator Publishing House.— Kommersant )". “We consider Russia as one of the last markets for strategic growth - the areas of software and electronic media are especially interesting,” confirms Holger Zscheige, CEO of Wolters Kluwer in Russia.

According to Sergei Tikhonov from Prof-Media, the b2b periodical market is growing by 30-40% per year and today, excluding specialized software (Consultant Plus, Garant, etc.) is $300-500 million in year. Other experts estimate the b2b software segment at another $150-200 million. For the Russian b2b publishing market, the deal between Wolters Kluwer and MCFR means the beginning of its intensive development and consolidation, Mr. Tikhonov said.

Yulia Kommersant-Kulikova, Evgeniy Kommersant-Khvostik

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