Quebecor Inc.'s TVA Group Inc. is buying 15 magazines from Transcontinental Inc., including Canadian Living and The Hockey News.
Printing and media giant Transcontinental said Monday it has struck a $55.5-million deal to sell its consumer magazines and their websites and related platforms to TVA, a transaction that bolsters the latter's existing stable of about 75 titles.
The move is part of Montreal-based Transcontinental's decision to focus on local advertising through its 180-odd newspapers in Quebec, Ontario, Saskatchewan and the Atlantic provinces.
Other titles in the transaction include Coup de Pouce, Elle Québec, Décormag, Le Bel Age, Style at Home, Elle Canada and Good Times.
Included in the deal is an agreement that will see Transcontinental print the magazines and related marketing products for TVA over a seven-year period, as well as extend contracts signed last year to print certain TVA magazines to the end of 2022.
The sale represents the unloading of Transcontinental's underperforming consumer magazine portfolio, National Bank Financial analyst Adam Shine said in a research note Monday.
Transcontinental is hanging onto Vancouver Magazine and Western Living, as well as a handful of business-related magazines.
Besides the magazine stable and other assets, TVA is Quebec's largest French-language TV broadcaster. It recently signed a deal with Rogers Communications Inc. for NHL French-language broadcasting rights. TVA also recently acquired feature film production company and studio owner Vision Globale for about $118-million.
Quebecor – controlled by Pierre-Karl Péladeau, who has distanced himself from the company for a career in politics – also recently sold its English-language Sun Media newspaper assets to Postmedia Network Canada Corp. for about $316-million.
And last year, Sun Media sold 74 local Quebec weeklies to Transcontinental.
The magazine acquisition announced Monday is a "step in the wrong direction" for Quebecor, Canaccord Genuity analyst Dvai Ghose said in a research note Monday. The shedding of assets, before the moves to buy Vision Globale and the magazines, represented a "shoring up of the balance sheet ahead of a potential national wireless launch and the increased focus on Videotron [cable, Internet, wireless], the jewel in Quebecor's crown," he said.
The acquisitions, while small, "divert focus from the core Videotron asset and the latest acquisition will put some upward pressure on overall balance sheet leverage if approved by the Competition Bureau."
The proposed magazine sale is subject to approval by regulators, including the Competition Bureau.