[IDG] China’s Oceanwide, IDG Capital to buy tech publisher IDG
China’s Oceanwide, IDG Capital to buy tech publisher IDG
(Reuters) International Data Group, the owner of PCWorld magazine and market researcher IDC, on Thursday said it was being acquired by China Oceanwide Holdings Group and IDG Capital, the investment management firm run by IDG China executive Hugo Shong.
It is the latest technology and media asset to be sold to Chinese investors, following deals for U.S. companies last year such as television producer Dick Clark Productions, and customer satisfaction firm J.D. Power and Associates.
Terms of the deal were not disclosed.
Reuters previously reported that IDG had been in advanced talks to sell itself to a Chinese buyout group and was seeking between $500 million and $1 billion.
Beijing-based conglomerate Oceanwide, founded by billionaire Lu Zhiqiang, pledged $3.8 billion to take control of U.S. insurer Genworth Financial Inc last year.
IDG will add to its media holdings in China including the Economic Observer, a business newspaper and a performance theater in Xi’an, Oceanwide director Brett Liu said.
IDG’s headquarters will remain in Boston.
Both Oceanwide and IDG Capital had initially bid separately for the entire company last April before IDG’s banker Goldman Sachs suggested they team up, IDG Chairman Walter Boyd said.
Oceanwide will now become the controlling shareholder in IDG’s operating businesses with Shong’s IDG Capital taking a minority stake. IDG Capital will take the majority stake in the IDG venture businesses.
IDG’s venture arm has invested in some of China’s biggest Internet companies such as Baidu, Tencent and Ctrip.com International.
Shong, a close associate of late IDG founder Pat McGovern, formed one of China’s first venture capital firms in 1993, initially with IDG’s backing.
The companies said the deal had been cleared by the U.S. Committee on Foreign Investment and would close in the first quarter.
The deal received approval just as President-elect Donald Trump’s tough commentary on China has made the future of that country’s investment in the United States uncertain.
Sources previously said regulators may dissect IDC, the market research division of the company that consults many U.S. technology companies on IT spending and strategy. Oceanwide is an investor in Hong Kong-computer maker Lenovo, which competes with many U.S. hardware firms.
IDC president Kirk Campbell said that his division does not expect to lose any technology clients. IDG declined to comment on the regulatory review.
Proceeds from the transaction will go to a foundation honoring the late IDG founder.
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China Oceanwide, IDG Capital agree to acquire IDG, publisher of PCWorld and Macworld
China Oceanwide Holdings Group and China-based IDG Capital have agreed to acquire tech journalism pioneer International Data Group, publisher of PCWorld, Computerworld, and hundreds of other tech publications worldwide.
Tech analyst firm IDC and venture capital firm IDG Ventures are included in the deal, announced Thursday. The size of the deal was not officially released, although a Wall Street Journal story put the price at less than US $1 billion.
IDG, a privately held company, operates in 97 countries. It was founded in 1964 by Patrick McGovern, who died in March 2014. Since then, the company has been run by a board of directors, which has been seeking a buyer for about a year.
IDG brands also include CIO, Macworld, InfoWorld, CSO, Network World, and IDG.tv. IDG is also the parent company of the IDG News Service.
China Oceanwide is a privately held international conglomerate founded by Chairman Zhiqiang Lu in 1985. The company operates businesses in the financial services, real estate assets, media, technology, and strategic investment markets, and it has more than 12,000 employees globally.
The company purchased a stake in Lenovo’s parent company, Legend Holdings, in 2009. It has continued to expand globally and in October last year, it agreed to buy U.S.-based insurance firm Genworth Financial for for $2.7 billion in cash.
China Oceanwide sees media as a new area for investments, according to its website. IDG is a “natural extension” of China Oceanwide’s international portfolio, Lu said in a press release. “As a world leader in market research and insights, a publisher of many of the tech industry’s most established media brands, and a successful venture investor, IDG’s strong global brand and profile make for an attractive strategic investment for us.”
IDG Capital is an independently operated investment management partnership, with IDG as one of many limited partners. It was formed in 1993 as China’s first technology venture investment firm.
The sale will continue McGovern’s vision of IDG, said Hugo Shong, founding general partner of IDG Capital and chairman of IDG Greater China.
“IDG’s culture is at the core of its success, and its strength has always been rooted in the talent and dedication of its people,” he said in a press release. “Our focus going forward will be on investing in the company and its people for growth over the long term, as we carry the flag for Pat’s legacy for many years to come.”
The deal, expected to close in the first quarter of this year, has received approval from the Committee on Foreign Investment in the United States (CFIUS), a U.S. government body, the companies said.
When the deal closes, China Oceanwide will become the controlling shareholder of IDG’s operating businesses, including IDC and IDG Communications, while IDG Capital will become the controlling shareholder of the IDG venture business.
IDG will continue to be headquartered in Boston, Massachusetts, and managed by its current team. Kirk Campbell will continue as president and CEO of IDC, and Michael Friedenberg will continue as CEO of IDG Communications. A new board of directors will be appointed.
http://www.pcworld.com/article/3159568/techology-business/china-oceanwide-idg-capital-agree-to-acquire-idg.html
What Is China Oceanwide?
Lu Zhiqiang was born in eastern China’s Shandong province in the early 1950s. He worked almost two decades in local engine factories before founding China Oceanwide in 1985. The company started as a property developer and has grown into a conglomerate with more than $20 billion in assets and investments in banking, insurance, energy, media and technology.
Mr. Lu’s wealth has also ballooned. He was the ninth-richest person in China in 2016, with a $13 billion fortune, according to the Hurun Report, a list of China’s wealthy.
China Oceanwide was a founding investor of a big Chinese lender, China Minsheng Banking Corp., in which it owns a 4.6% stake. It also owns a big stake of the company that controls Lenovo Group Ltd., the world’s biggest personal-computer maker, whose founder is a close friend of Mr. Lu.
Overseas, China Oceanwide has invested aggressively in U.S. commercial real estate, and made its first foray into insurance with the $2.7 billion purchase of U.S. insurer Genworth Financial Inc., in October 2016. The company is leading a consortium of investors to purchase data and marketing firm International Data Group Inc., which runs a venture-capital firm that invests heavily in Chinese startups.
Mr. Lu keeps a lower profile than Chinese tycoons like Alibaba Group Holding Ltd.’s Jack Ma or Dalian Wanda Group Co.’s Wang Jianlin, though he is a donor to a program created by Blackstone Group LP’s Steve Schwarzman to bring international and Chinese students together in Beijing.