Determining Value for a Publishing Company

April 2006
by Howard W. Fisher and Daniel R. Siburg

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Many publishers think their
companies have unique characteristics that buyers will value and that standard
valuation approaches and methods are therefore not applicable. It is true that
each publishing company is unique, but buyers use standard valuation approaches
to help determine the price they are willing to pay, and the ultimate value of
a publishing company can be determined only when the buyer and seller agree on
the purchase price.

There is no exact formula for
determining the value of a publishing company, but considering certain
variables helps sellers and buyers arrive at a value range.

Sellers tend to start out thinking
in terms of higher prices than the market is willing to pay. Although the sale
of a publishing company is a personal event to the seller, it is a business
transaction for the buyer. Remember that a buyer will not overpay for a
publishing company. Your expectations need to be based on real valuation
approaches.

Types of Buyers

There are four types of buyers for
publishing companies, and their reasons for buying a company affect the value
they see in it.

Strategic
buyers want to purchase in order
to control a publishing category.

Investment
buyers are interested in owning a

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