LONDON Dozens of journalists at oil-price reporting agency Argus Media are set to become multi-millionaires when a deal to bring an investor onboard goes through later this year, potentially valuing the firm at as much as $1.3 billion.
Argus, which makes the bulk of its revenue by assessing energy prices and selling subscriptions to the industry, has been seeking investors since last year to expand its business and as some of the founding shareholders want to sell out.
The firm is in the final stages of reaching a deal to sell a stake, with four investment and private equity funds vying and prepared to value the company at up to 900 million pounds, according to sources close to the bidding process. Argus declined to comment.
The deal will make founding members - the Nasmyth family - and Argus' chairman and publisher Adrian Binks worth hundreds of millions of dollars, according to disclosure documents.
But it will also turn dozens of Argus' shareholding employees - many of whom are journalists - into multi-millionaires in a development that contrasts deeply with the woes facing much of the general print media.
While traditional news outlets have cut hundreds of staff in recent years as they struggle to compete with free online media, niche publications have thrived due to rising demand from specialized audiences for high-quality, selective information.
This development certainly rings true for Argus, whose beginnings date back to 1970 when Jan Nasmyth set up the weekly newsletter Europ-Oil Prices to cover the oil products market in Western Europe just as global energy trading picked up.
Binks, after a career with BP (BP.L), bought a stake in the newsletter in 1984 and was appointed managing director.
Argus expanded in the following decades, competing with other price-reporting agencies such as Platts and Thomson Reuters (TRI.TO), acquiring smaller rivals and establishing itself as a benchmark in some crude and gasoline markets.
Its sales grew by 15 percent in the 12 months to June 30 last year to 123 million pounds, and pretax profit rose by around 10 percent to 32.5 million.
After the Nasmyth family decided last year that it wanted to sell out, Argus attracted as many as 60 potential buyers and investors despite a steep fall in energy and other commodity prices, according to industry sources.
A consortium of private equity firm Charterhouse Capital Partners and the Canada Pension Plan Investment Board, and U.S. buyout firm Hellman & Friedman are thought to be among the final bidders. Intermediate Capital Group (IGC), General Atlantic and Permira might also be bidding, Sky News reported on Wednesday.
IGC declined to comment, while other potential bidders were not available for immediate comment.
"It is remarkable that in an environment where you can buy an oil company for $1 you have to pay over $1 billion for an oil publisher," a source familiar with one of the bidders said.
"The reasons behind it are quite simple - money is cheap these days, investors are looking for stable returns on investments and Argus is delivering. However, I don't think their subscription can be entirely isolated from the oil price weakness," he said.
Argus' filing to UK corporate registrar Companies House last June showed that more than 36.4 million shares in the company were held by around 80 individuals. A separate filing last month showed Argus had granted extra options for around 0.5 million shares.
The Nasmyth family owns over 18 million shares, or half the stock, with a value of at least $650 million. Binks, who sources say does not plan to sell out, owns close to 10 million A and B class shares. He is the only shareholder with B shares, which give additional voting rights.
The registrar also shows that around 40 employee-shareholders, many of whom are current or former journalists, own enough shares to give them a valuation of $1 million or more.
Among the other top shareholders are head of business development Peter Caddy with almost 1 million shares, which would value him at above $35 million, Argus America's president and head of business development Daniel Massey with over 730,000 shares, and CEO Americas Euan Craik with over 300,000 shares.
Argus' editor Ian Bourne, who joined the company in 1995, holds close to 200,000 shares.
(Editing by Dale Hudson)