Magazine article Searcher

Information Industry Mega-Sales: Mead Data Central, Ziff-Davis, et Al

Magazine article Searcher

Information Industry Mega-Sales: Mead Data Central, Ziff-Davis, et Al

Article excerpt

A seller's market is driving an explosion in acquisitions and company offerings within the information industry these days. In descending order of importance for the daily working life of professional for the daily working life of professional searchers (although it's a close call in some cases), we shall try to cover the major sales of information industry companies.

Mead Data Central Up for Sale

The last of the old-time search services finally heads for a new owner. Mead Corporation has decided to reconcentrate itself on its main paper and forestry products and sell off the leading full-text search service, Mead Data Central. A company based on the technolgy that underlaid the decision support system Cheops used to build the Great Pyramid, a technology ancient when Christ was a babe, has decided to divest itself of a subsidiary racing toward the next millennium.

The sale is open to all bidders. Goldman, Sachs apparently has orders to get the best price possible for Mead shareholders. The divistiture should be completed this year. Experts project a price ranging anywhere from $750 million to $1.3 billion. Mead Corp. acquired Mead Data Central for $6 million in 1968 and turned it into the world's largest legal and news search service, with hundreds of thousands of users and millions of documents from over 4,000 sources. Last year they had earnings of over $50 million on sales of around $531 million. This year, estimates of earnings have run much higher. MDC also includes the Michie Company, a legal print and CD-ROM publisher; Jurisoft, legal software publisher; and Folio Corporation, a text and document retrieval software house.

Rod Everhart, president of Mead Data Central, spoke about the sale: "Mead Corporation has been a good parent for the last 25 years. They have nutured and protected us, but they are not in our business. Technology in our field is accelerating. We have greater needs for more technology, content, and funding."

Candidates

International Thomson has already announced their interest in MDC. West Publishing, home of the competitor Westlaw service, expressed no interest in the bidding at press time though rumors still circulate. Vance Opperman, president of West, stated that West "welcomed competition" and was "curious to see who buys it [Mead]." Suggested possible buyers include Times Mirror (publisher of the Los Angeles Times), Reed International, AT&T, the New York Times Company, Reuters, Dow Jones, Knight-Ridder (parent of DIALOG), and British Telecom. The sale will be conducted through a confidential auction.

Ziff going on the block at the same time [see story below] may reduce the number of bidders for Mead or decrease the amount of money offered. However, one attentive industry watcher observed that Ziff's family ownership and lack of debt could give a purchaser the chance to cover acquisition costs with debt. A really committed purchaser might even be able to acquire both.

If Anyone Asks...

For searchers, a lower final selling price might be better than a higher one. Mead Corporation may only want the top dollar, but Mead Data Central's searchers--both today's and tomorrow's--need an owner with enough resources and commitment left after the sale to provide MDC with the technology boost it needs to hit the next century running. Publishers, with content-based concerns, might give tomorrow's MDC flexibility on pricing and alternative media format approvals, but they might not have what it takes to build a new software engine, install new hardware, and re-engineer the whole service. …

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