Gameland acquired Mediasign publishing house

Gameland's purchase of all the assets of its rival publishing house Mediasign was the first example of consolidation in the market for specialized magazines. The deal, which is estimated at $18-20 million, was financed by Troika Capital Partners (TCP), purchasing shares from Gameland’s additional issue.

The Gameland company acquired 12 magazines, ten Internet portals, as well as exhibition projects of the Mediasign publishing house, the company’s development director Pasha Romanovsky told Kommersant. This information was confirmed by Mediasign CEO Oleg Argirov. This is the first example of consolidation of two companies in the market of specialized magazines. The deal was financed through an additional issue of Gameland shares, which was acquired by the Russian New Growth Fund (RNGF), managed by TCP. As a result of the additional issue, the share of RNGF turned out to be close to the controlling one, TCP investment manager Nikolai Timokhin specified.

Gameland publishes 19 magazines ("Land of Games", "PC Games", "Hooligan", Total DVD), owns the Gameland TV channel, online television ICQ TV and ten Internet projects. According to its own data, the audience of all the company’s media is 6.5 million people a year. Before the additional issue, 55% of Gameland belonged to founder Dmitry Agarunov and top management, 25% to Troika Capital Partners, 20% to Mint Capital. The declared turnover in 2007 was more than $22 million.

Until recently, the Mediasign publishing house was 100% owned by the financial and investment company Camden Partners LLP. Published magazines "Car Tuning", "Fast and Furious", "Tuning Expert", CarMusic and others. The Publishing House includes ten Internet portals and a number of exhibitions. Revenue in 2007 is estimated at $14-15 million.

After the purchase of Mediasign, the value of Gameland increased significantly, says Igor Piskunov, deputy director of the media project management department at RAINCO. In the fall of 2007, TCP became a shareholder of Gameland, investing $12 million in the company. TCP bought 25% of Gameland, based on an estimate of $40 million for 100% of the company. “The multiplier on the print media market is 1.2-2 times the company’s turnover. If we take into account Mediasign’s estimated sales in 2007 and take into account this year’s growth, the company’s value could be $18-20 million,” calculates Eastway Capital CEO Alexander Volchkov. Thus, the Gameland company merged with Mediasign, taking into account growth this year, could cost $60-70 million, he adds.

By consolidating the two largest players in the specialized press market, portfolio investor TCP increased the value of its share in a promising asset and made it more interesting to strategic investors, points out Igor Piskunov. According to Pasha Romanovsky, the growth of the market for specialized magazines (20% of the total magazine market) is 40-45%. The Association of Communication Agencies of Russia estimates the volume of advertising sales in magazines in 2007 at 23.4 billion rubles.

Olga Kommersant-Goncharova

The specialized press has expanded its format