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GTC Transcontinental Group Ltd. has agreed to acquire the magazine publishing assets of Telemedia Communications Inc. for $150-million, a move that takes the specialty publisher into mainstream media.

Along with TV Guide Canada, GTC will add to its title list such well-known consumer publications as Homemaker's, Canadian Living, Elle Québec, Style at Home, Western Living and Vancouver Magazine.

"This will create an incredible franchise," said André Préfontaine, president of Transcontinental Publications, a division of GTC with annual revenue of $90-million. The assets being acquired from Telemedia will add another $120-million to annual revenue. Both companies are based in Montreal.

The deal puts GTC just behind the publishing division of Toronto-based Rogers Communications Inc., Canada's largest magazine publisher. Rogers, with its stable of Maclean's, L'actualité and Chatelaine, generated annual revenue of $273-million in 1998.

"It is as you say a fiercely disputed market," Mr. Préfontaine said. GTC's strategy is to be "a niche and specialty publisher" with the leading position in each of its market segments.

Looking at the opportunities, Mr. Préfontaine suggests that the 10 titles, both in English and French and dedicated to women readers, could become an integral part of an Internet Web site, as GTC views magazines as a way of entering the electronic commerce market in Canada.

GTC's publishing assets specialize in business, finance, sports and trade publications. It expects to complete the acquisition of the Telemedia assets by the end of March.

GTC's publishing division is just one slice of a huge company with revenue for the nine months ended July 31, 1999, of $1.1-billion, on which it made a profit of $32-million.

GTC is one of the 10-largest commercial printers in North America, and it is also engaged in manufacturing of digital audio and database compact discs, publishing weekly newspapers, distributing advertising door to door and publishing specialized periodicals.

"It gives [GTC]a very strong business," said Stephannie Larocque, an analyst for Warburg Dillon Read. "I think GTC has a good management and we expect positive results from this acquisition."

The family of GTC chairman Rémi Marcoux controls a 67-per-cent voting interest in GTC along with the Caisse de dépôt et placement du Québec.

As part of the shuffle, Telemedia, which owns 76 radio stations across Canada and two television stations in British Columbia, said that the sale of its publishing arm will allow it to focus on the radio business. The company was taken private in 1997 by the de Gaspé Beaubien family. In May, Telemedia acquired the Okanagan Skeena Group Ltd. for $92.7-million, expanding its cable TV and broadcasting presence in Western Canada.

"Consolidation in the Canadian publishing industry was inevitable and we are pleased Telemedia's publishing division has been sold to a Canadian company, thereby ensuring the strengthening of the Canadian magazine industry and its ability to provide Canadian content for Canadians," said François de Gaspé Beaubien, president of Telemedia's publishing division.

Through acquisitions, Telemedia has increased the number of radio stations it owns to 76 from 22 in just 10 months. Mr. de Gaspé Beaubien said the money from the sale of its publishing arm will be used to continue the expansion of its radio business.

"We want to be the pre-eminent radio broadcaster in Canada," he said. "In our opinion it's just the beginning."

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