ALMA MEDIA CORP. STOCK EXCHANGE RELEASE 30 MAY 2005, 3.00 PM 1 (2)
ALMA MEDIA ACQUIRES ONLINE INFORMATION SERVICE AND FORMS JOINT VENTURE WITH TIETOENATOR'S DIRECT MARKETING UNIT
Alma Media's Kauppalehti group is strengthening its online information services with the acquisition of TietoEnator's ePortti business. Kauppalehti Group is also establishing with TietoEnator a joint venture company, TietoEnator 121 Oy, that will focus on direct marketing. The price for the ePortti operations is EUR 3.5 million and for the holding in the joint venture company EUR 3.3 million. Altogether 12 TietoEnator employees will be transferred to Alma Media and 61 to the joint venture. The agreements will come into force after the approval of the competition authorities.
The ePortti business will be integrated within Kauppalehti Online while the direct marketing unit will be formed into a joint venture company within Kauppalehti Group, TietoEnator 121 Oy (one-to-one), in which Kauppalehti will have a 49% holding and TietoEnator 51%. The transaction wil raise Kauppalehti Group's annual net sales by almost 10%. The profitability of ePortti and 121 Oy is expected to show favourable growth during the current year. Kauppalehti group (BIG) had net sales in 2004 of EUR 49.1 million and an operating margin of 11.0%.
Online information services and direct marketing are growing businesses, noted Juha Blomster, Managing Director of Kauppalehti group. Kauppalehti Online and ePortti will together form the leading b-to-b online service in Finland. Furthermore Kauppalehti group will be able to effectively exploit Alma Media's other newspapers and the large number of visitors to its Internet pages in marketing the new services. Direct marketing is a new channel in Kauppalehti group's offering and it provides a media for business to consumer (b-to-c) marketing. Kauppalehti has an option to acquire TietoEnator's holding in the company after a successful joint venture phase. Blomster states that the goal is for 121 Oy to become a Kauppalehti subsidiary in one year's time.
The acquired business contains no overlaps with Alma Media's existing business operations. The transaction will not result in any personnel reductions. ePortti employs 12 people who will transfer to Alma Media retaining their existing status and benefits. The joint venture will employ 61 people.
The ePortti online information service combines the information and documents used by more than 20 public offices and companies. Designed for use by companies and public administration, this service contains information on companies, individuals, real estate properties, statistics and legislation.
The direct marketing joint venture will take Alma Media into a new area of business. The deal supports the Group's strategy of reducing its dependence on media advertising.
The direct marketing services company will specialize in providing high-value-added services for targeted and interactive marketing. Already at its creation the company will be market leader in Finland in direct marketing services produced from population and traffic information systems. Its net sales in 2004 totalled EUR 8.6 million. The company offers a full-service direct marketing concept that includes contact information on companies and private consumers, profiles and analyses, target group consulting, customer register management, printing and mailing, and customer feedback management and analysis.
Alma Media's Kauppalehti group specializes in producing business and financial information. The group distributes this information via the press, the Internet, television, radio and mobile devices. The division comprises Kauppalehti, Balance Consulting Oy, Baltic News Service and the Lehdentekijät group (customer magazines) as well as two associated companies: Talentum Oyj (31.1 %) and Efektor Oy (19.5 %). The Kauppalehti Online website has had almost 100,000 visitors a week since the beginning of 2005.