Chrysalis Group plc has agreed to sell its loss-making books publishing division in a management buyout, the British-based independent music firm said today (Nov. 7).
In a detailed message issued this morning to the London Stock Exchange, Chrysalis confirmed it had reached agreement with Anova Books Company Limited to spin off its non-core books unit for £12.5 million ($21.8 million). This will take the form of a £9 million convertible ($15.7 million) 10-year loan stock and £3.5 million ($6.1 million) at 3%.
Anova Books is led by Chrysalis Books’ current CEO Robin Wood and senior managers from the division.
Chrysalis had earmarked the books unit for sale more than a year earlier as part of its ongoing re-focus on its radio assets, which include the AC Heart and dance Galaxy radio stations, and its music division, encompassing record label Echo and music publishing unit Chrysalis Music.
“The exit from our loss-making and non-core books division achieves our objective of focusing Chrysalis Group on our core radio and music businesses,” comments Chrysalis CEO Richard Huntingford in the statement, “where we enjoy strong market positions that offer good growth prospects and potential for developing long-term shareholder value.”
For the year ending Aug. 31, 2004, Chrysalis Books reported a loss before tax of £2.8 million ($4.9 million). It has since undergone a restructuring and cost-saving exercise. Chrysalis Books is expected to report “weaker than expected” revenue of £21.2 million ($37 million) for the current financial year, with underlying losses of £4.5 million ($7.8 million).