Prices for publishing companies in the next year should be higher than during the recession, but not as high as in the bubble years, Bob Halper said at Cowan Liebowitz & Latman’s annual publishing seminar. “You can’t anticipate pricing like in 2006 and 2007 because those market conditions don’t exist any more,” said Halper who has been doing mergers and acquisitions with CL&L for 25 years.
The improving economy and greater availability of financing are helping valuations to recover, Halper said, but noted that uncertainty over what the digital transformation will mean for publishers can complicate a deal. Halper pointed out that most of the publishing acquisitions done in 2010 were not content drive, but involved technology. Still, there is interest in publishers with quality content, particularly content that works well in digital formats, and sellers can expect to receive prices that are “a bit below, but not striking below,” pre-recession levels. Historically, trade publishers sold at an acquisition price between 1 times to 1.5 times revenue. A key for valuing publishers in the future will be their ability to generate the same level of cash flow from the sale of digital products as they do for print.