J2 Global buys tech publisher Ziff Davis for $167M
LOS ANGELES (AP) — Business cloud services provider j2 Global Inc. said Monday it bought privately held digital media company Ziff Davis for $167 million in cash.
New York-based Ziff Davis, long a leading technology magazine publisher before sinking into bankruptcy in 2008, now operates online and owns websites PCMag.com, ComputerShopper, ExtremeTech, Toolbox.com and Geek.com.
J2 said the purchase from Great Hill Partners in Boston should contribute approximately $60 million to its 2013 revenue while supporting its ongoing push in digital media and online marketing.
"This acquisition brings scale to this effort with a top leadership team deeply committed to building the business through organic growth, which we expect to continue," said Hemi Zucker, j2's chief executive.
J2 offers Internet fax, virtual phone, hosted email, email marketing and other services which it markets under the brand names eFax, Onebox, eVoice, Campaigner, Fusemail, KeepItSafe and CampaignerCRM.
The company said its revenue for 2012 will now exceed $365 million, the previous high end of its estimate. It also reaffirmed that adjusted earnings per share for 2012 will exceed those of 2011.
On average, analysts surveyed by FactSet forecast earnings per share of $2.61 and revenue of $358.8 million for 2012.
The acquisition represents "a nice tangential growth opportunity for j2, as the company looks to expand its marketing and cloud services segment over the coming years," FBR Capital Markets analyst Daniel Ives said in a note to investors. "This deal should also give investors more comfort that j2 is focused on expanding its addressable market opportunity outside of its core bread and butter fax segment."
Ziff Davis is a remnant of a publishing empire established in the 1920s by William B. Ziff Sr. and Bernard G. Davis, who introduced such titles as Popular Aviation and Popular Electronics. The Ziff family sold most of its stake to a private equity firm in 1994, and it's had a succession of owners since then.
Shares of j2 Global rose 90 cents, or just over 3 percent, to $30.26 in afternoon trading.