Printing business St Ives has sold its loss-making magazine business to a private equity firm for £20m.
The deal will see Walstead Investments pay £15m cash for the printing business and a further £5m in loan notes.
The magazine division, which employs about 670 people and produces print copies for firms like Conde Nast, suffered pre-tax losses of £5.1m in the 12 months to the end of July from revenue of £70.5m.
St Ives will retain ownership of the properties currently occupied by the magazine business in Peterborough, Plymouth and Roche and will lease them to Walstead following the disposal.
The company said: ‘St Ives has continued to experience particularly tough conditions in the magazine business’ markets in recent years, where excess capacity has exerted significant downward price pressure, resulting in poor levels of profitability.
‘These markets also face structural challenges with the increasing trend of migration of advertising and content into digital formats.
‘The Disposal will realise significant value for St Ives and the net proceeds will be used to strengthen further the continuing group’s balance sheet, and to provide additional flexibility to invest to improve the business.”