GVIC Communications Corp.

January 23, 2015 11:15 ET

GVIC Announces Trade Media Asset Sale

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Jan. 23, 2015) - GVIC Communications Corp. (TSX:GCT) ("GVIC" or the "Company") announced today that it has sold a group of its trade media publications and related assets to Annex Business Media ("Annex") and Newcom Business Media Inc. ("Newcom") for $19.65 million.

The assets being sold include GVIC's automotive, construction & design, manufacturing, transportation, occupational health & safety, communications, dental, insurance, forestry, and meetings & travel trade publications and related digital assets, as well as Scott's Directories. The operations are located in Toronto.

GVIC is retaining the ERIS environmental risk information business, Northern Miner mining information group and Food in Canada business that were operated with the group of assets being sold, and will retain the revenue and contribution from these assets.

The sale of the assets is part of GVIC's previously disclosed program of value enhancement initiatives designed to 1) narrow the spectrum of businesses owned and managed by the Company in order to deploy capital, resources and effort in high growth areas and maximize operational focus and effectiveness, and 2) cover the required deposit relating to the Company's previously disclosed obligation to Canada Revenue Agency, and further strengthen its financial position. The assets being sold cover a broad spectrum of industry verticals, which did not align with GVIC's strategy to narrow the number of verticals within which to operate.

Going forward, GVIC intends to focus its growth efforts in 1) the global agriculture, energy and mining information sectors, given Canada's important international presence in these natural resources sectors and the strong competitive position GVIC owns in the related information spaces, 2) the environmental risk information space, 3) the real estate information space, and 4) the mutual fund information space. These sectors are dynamic in nature, and their changing and continually evolving needs are expected to increase the demand and value relating to information, intelligence and marketing solutions provided to them.

GVIC is pursuing these growth efforts in its business information operations through a comprehensive Evolve, Enrich and Extend strategy. The strategy focuses on providing richer content, data and information, related analytics and business and market intelligence, as well as more comprehensive and sophisticated marketing solutions. Through this enrichment, products and services achieve greater customer utility and decision dependence.

The strategy is intended to provide growing levels of sales from high-margin products with high levels of recurring revenue, while requiring low levels of sustaining capital investment in order to generate strong free cash flow and return on capital. As implementation of the strategy accelerates, it is expected that a greater portion of the Company's revenue will come from subscription, specialized report, customized application and other recurring revenue oriented rich information product sales. Almost half of GVIC's business information EBITDA currently comes from rich information recurring revenue products.

Shares in GVIC can be traded on the Toronto Stock Exchange under the symbol GCT.

About the Company: GVIC Communications Corp. is an information company focused on the provision of primary and essential information and related services. GVIC is pursuing this strategy through its core businesses: the trade information, business and professional information markets, and community media.

Forward Looking Statements

This news release contains forward-looking statements that relate to, among other things, the Company's objectives, goals, strategies, intentions, plans, beliefs, expectations and estimates. These forward-looking statements include, among other things, statements relating to the Company's expectations regarding revenues, expenses, cash flows and future profitability and the effect of its strategic initiatives, including our expectations to grow sales levels, increase recurring revenue and generate cash. These forward looking statements are based on certain assumptions, including continued economic growth, and are subject to risks, uncertainties and other factors which may cause results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements, and undue reliance should not be placed on such statements.

Important factors that could cause actual results to differ materially from these expectations include failure to implement or achieve the intended results from the Company's strategic initiatives and the other risk factors listed in the Company's Annual Information Form under the heading "Risk Factors" and in the Company's MD&A under the heading "Business Environment and Risks", many of which are out of the Company's control. These other risk factors include, but are not limited to, the ability of the Company to sell advertising and subscriptions related to its publications, foreign exchange rate fluctuations, the seasonal and cyclical nature of the agricultural industry, discontinuation of the Department of Canadian Heritage's Canada Periodical Fund, general market conditions in both Canada and the United States, changes in the prices of purchased supplies including newsprint, the effects of competition in the Company's markets, dependence on key personnel, integration of newly acquired businesses, technological changes, tax risk and financing and debt service risk.

The forward-looking statements made in this news release relate only to events or information as of the date on which the statements are made. Except as required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.

Contact Information

  • GVIC Communications Corp.
    Mr. Mark Melville
    Executive Vice-President