Schibsted has paid €100m to acquire the 10% of Spanish classifieds group SCM that it did not already own. The deal comes just ahead of the Norwegian company’s demerger of its online classifieds outside Scandinavia. SCM, whose brands include Milanuncios, Coches, InfoJobs, Fotocasa and Habitaclia, has a leading position in the Spanish market and grew its revenue last year by 19% with its €46m EBITDA representing a 64% increase.
Schibsted’s decision to spin-off its international digital operations will create MPI, a Nasdaq-listed company with 51% of its revenues in France, 27% in Spain and 22% in 14 other countries including Italy, Ireland, Hungary and Colombia. Almost 70% of MPI revenues will come from classified verticals in cars, real estate and jobs. Originally a newspaper group, the 180-year-old Schibsted has been at the forefront of the global expansion of online classifieds.
More than 10 years ago, Rupert Murdoch described it as “the best media company in the world”. Schibsted (which is controlled by a protective trust) will retain a 60% share of MPI after its listing in March this year but makes the point that it wants none of the safeguards and special voting rights it enjoys at the Scandinavian business: MPI will soon be free to compete, do deals and even be sold. Most observers expect the IPO of MPI (with former Schibsted boss Rolv Erik Ryssdal as CEO), therefore, to be the focus of consolidation in online classifieds whose principal global players include Naspers, Ebay, and Axel Springer.
Which company will want to merge with the $650m-revenue MPI? Perhaps the most tempting scenario involves Springer, arguably the world’s best news-based digital group. The Berlin-based company (increasingly international and 70% digital) must once have flirted with the idea of a Schibsted like de-merger when it had a classifieds joint venture with US investor General Atlantic during 2012-16.
A combined MPI-Springer classifieds group could become an unrivalled global leader. But, while Springer’s fast-growing classifieds are concentrated heavily in Germany, UK, Belgium, France and Israel (and, therefore, have relatively little overlap with MPI) and account for “only” 38% of group revenues, they do account for more than 60% of its EBITDA – and most of the growth of the €6bn company.
But some kind of deal might still be a tempting prospect, given MPI’s forthcoming listing in the US, where Springer (owner of the 300m-audience, now-profitable Business Insider) is a significant digital player. If not, perhaps Ebay or Naspers will step in. Let’s watch.