Caxton and Habari in talks, possibly around acquisition

Ventureburn has learned that South African publishing giant Caxton is in talks with digital sales house Habari, possibly surrounding an acquisition.

While Caxton is probably best known for the range of magazines and community newspapers it publishes, it is also one of the country’s largest commercial printers and has been in serious acquisition mode of late.

Last year, it acquired a majority stake in South African business and financial news site Moneyweb, previously having held a 34% stake in the company.

Earlier this week meanwhile it completed a deal which gives it full ownership of RamsayMedia — the publisher which owns a number of magazine titles including Getaway, Car and Popular Mechanics as well as the online properties associated with them. Previously, Caxton had held a 30% stake in the company, with the remaining 70% held by the Ramsay family — who have run the publishing house since 1933.

When Ventureburn spoke to Habari founder Adrian Hewlett however, he played down acquisition talks. While confirming that there had indeed been discussions between the two companies, he was quick to point out that the digital sales house is in discussions with major South African media houses on a fairly regular basis.

“We’ve been in talks with every major media house once a year for the past five years,” he told us. “We always get approached, but that doesn’t mean we’re ready to sell”.

“That’s not to say we wouldn’t if we got the right offer,” Hewlett added, “but as things stand, we’re not ready yet.”

It’s understandable that Habari’s getting a lot of attention, especially from the big media houses. Digital ad revenue in South Africa is on the up, accounting for R864-million worth of the country’s adspend. By way of contrast, print advertising has dropped sharply, mirroring the global situation.

While Caxton’s large portfolio of community newspapers mean it will probably face less damage from the growing online onslaught, it would make sense for it to have as much digital expertise on board as possible.

Habari Media certainly offers that, having handled an array of large clients including MTV, the BBC and LinkedIn. It’s also the sales partner for Facebook across sub Saharan Africa. Earlier this year, meanwhile, it launched Hummingbird, a Facebook campaign management tool. All of which make it an attractive acquisition target.

It’s also worth bearing in mind that the low interest rate environment we currently find ourselves in has resulted in an increase in mergers and acquisitions as big companies look for the kind of capital returns that banks simply can’t offer at the moment.

If Habari Media has as many suitors as Hewlett says it does however, then it probably can afford to wait.