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A while back we reported that South African publishing giant Caxton was in talks with digital sales house Habari, possibly around an acquisition. We can now confirm that was the case, with Caxton taking a 100% stake in Habari.
When Ventureburn contacted Habari founder Adrian Hewlett, earlier today he could neither confirm nor deny that the acquisition and was unable to provide any official comment on the story.
Update: In a statement issued by Habari Media on the announcement, Hewlett said:
The company [Habari Media] can continue to grow and enhance their existing offering by combining all the elements that have made the business so successful over the last nine years with the additional firepower and media assets within the Caxton group. Habari Media, and its ambitious team, will benefit immeasurably from being within the Caxton stable, a company which is not only committed to, but has the means to, make a meaningful impact on the digital market in Africa.
Initially it was unclear precisely how large the stake would be, but Caxton’s previous acquisitions suggested that it was always likely to be big. In 2012, 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 year meanwhile, it gained 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. Prior to the deal, 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.
As we noted in November, Habari could potentially be a very clever buy for Caxton. It has, after all, handled an array of large clients including MTV, the BBC and LinkedIn. It’s also the sales partner for Facebook across sub Saharan Africa and earlier this year it launched Hummingbird, a Facebook campaign management tool.
It also makes a lot of sense for Caxton to get into the space Habari plays in. Digital ad revenue in the South African sector is on the up, accounting for R864-million worth of the country’s ad spend. Print advertising — for which the media publishing side of Caxton depends on much of its revenue — has dropped sharply, mirroring the global situation.
Founded in 1902, Caxton is the largest publisher and printer of books, magazines, newspapers and commercial print in South Africa. It also owns the Newspaper Advertising Bureau (NAB), which represents 150 of the company’s community newspapers.
Habari Media meanwhile, was founded in 2004 and has offices in Cape Town; Johannesburg; Nairobi, Kenya and Lagos, Nigeria. In 2012, Hewlett created the integrated agency Machine out of a number of disparate properties, including his through-the-line agency Big Wednesday, digital and social media outfit Domino, Habari Direct (which focused on below-the-line marketing) and Habari Research, a digital marketing research tool.
With the launch of Machine, Hewlett split up the Habari group. Habari Media and the mass market focused Habari XL were placed on one side and Machine on the other. At this stage it’s unclear whether or not Machine will be affected by the deal. Each of the businesses is however a Pty in its own right.
Update: Habari Media has confirmed that Machine will be unaffected by the acquisition. It added that the company’s operational team, consisting of managing director Wayne Bischoff; sales director Garth Rhoda; insights director Byron John and commercial director Marius Greeff.
“The buyout represents a huge opportunity for Habari Media and we are very excited to become a part of the Caxton group”, says Bischoff, “We look forward to exploiting synergies across the existing portfolio of Caxton’s media platforms and brands, whilst continuing to provide existing partnerships and advertisers with the same level of professional service they have become accustomed to”.
According to Herman Manson of Marklives, the deal also ends any perceived conflict of interest between Machine and Habari Media.
Ventureburn will update the story as more details emerge.