On October 2, 1997, Knight-Ridder, Inc. and MAID plc, a U.K. firm specializing in business information and owner of the Profound business end-user service, announced an agreement to purchase Knight-Ridder Information for $420 million. This confirmed rumors that had reached print in late August. As I write this--shortly after the announcement--they expected to complete the sale in November, though several major steps still needed completion. The sale included other parts of KRI, such as DataStar, CARL, and minority shareholdings in Frost & Sullivan; Individual, Inc.; and Teltech Resource Network Corporation.
Knight-Ridder originally purchased DIALOG Information Services from Lockheed Corporation in 1989, paying an estimated $353 million. In the nearly 9 years since the purchase, Knight-Ridder acquired several other firms and added them to the KRI family, including DataStar in 1993 and CARL Corporation and the UnCover Corporation in 1995. Some analysts estimate that Knight-Ridder spent up to $400 million in acquisitions and other investments during the period they owned DIALOG. Knight-Ridder needs the money to pay off the purchase of four newspapers from the Walt Disney Company and for share repurchase and debt reduction.
MAID's founder and CEO, Daniel Wagner, announced that they planned to re-name KRI into the Dialog Corporation. Wagner promised that "the focus of this new global leader will be to support the information specialist, with the services they have grown to rely upon, while reaching new end users with simple-to-use customer interfaces." The MAID Web site even had a tentative logo for the new corporation, looking a little reminiscent of the USS Enterprise ("Star Trek" Classic model) with a big red dot and flattened blue concentric circles. (Although we could not get permission to use the prospective logo, interested readers may still find it on the MAID Web site at http://www.maid-plc.com/question/logo.html. The site offers to forward the latest information to the e-mail boxes of anyone who registers and maintains statistics on which questions come from which types of users. For DIALOG's coverage of the sale, try http://www.dialog.com/frames/sale.html.)
In 1995, MAID (which stands for Market Analysis and Information Database) itself launched the Profound service, available via private dial-up in 1,100 cities worldwide and through the Web and headquartered out of MAID's U.S. offices in Cary, North Carolina. The service offers world business news, market research reports, economic and political statistics, and trade press.
If or when the financing and British and American regulatory processes clear, MAID would present the acquisition proposal to an extraordinary general meeting (EGM) of shareholders for their approval. The acquisition is conditional upon all these steps going smoothly.
If the purchase goes through, MAID management has announced that they intend to institute cost-saving measures that would save up to $35 million a year in the first 3 months, with further cost savings anticipated in the future. They have also announced intentions to sell off non-core activities, particularly those related to document delivery and library development. (This might affect KRI's KR SourceOne service and CARL/UnCover.)
Comparing the two companies, analysts estimate the acquisition would double the size of MAID financially and increase the scope of its data coverage 20 times. KRI has an estimated 30,000 clients and over 160,000 active passwords; MAID has 4,700 clients. KRI also has over 1,100 employees, a number that has risen substantially in the last 2 years; MAID has around 400. In 1997, KRI sales ran around $290 million, while one report placed MAID's revenue at just under $34 million. MAID's last major acquisition was $9 million for a 70 percent stake in the British company Muscat Limited, developers of an intelligent, post-Boolean, statistical search engine able to create a central index from a number of Web sites.
Should the deal not go through, Knight-Ridder could face a substantial drop in "take" from the sale. A Wall Street Journal report indicated that several other publishing corporations had competed to buy DIALOG, including Reed-Elsevier, Reuters, and even Dow Jones itself. Rumors circulate that the next two serious bidders for Knight-Ridder Information made offers well under $300 million, in contrast with MAID's reported offer of $420 million in cash.
As the process continues, we will keep you advised. Watch this spot for new or updated Newsbreaks.
Knight-Ridder Information, Inc.
2005 Market Street, Suite 1010
Philadelphia, PA 19103
Knight-Ridder Information, Inc.
2440 El Camino Real
Mountain View, CA 94040
The Communications Building
48 Leicester Square
London WC2H 7DB
(from the U.S.) 011 44 171 930-6900
(from the U.S.) 011 44 171 930-6006 (fax)
11000 Regency Parkway, Suite 400
Cary, NC 27511