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Valuation of a Book Publishing Title List

Rick Bigelow's Profile

I have been asked to value the book list for a small publishing house.  I have finalized the pure data anlysis of annual net sales, units, royalty rates, transferability and assignability, inventory obsolesence, etc.  Now I am at the point of valuing the list itself.  This will be a simple asset sale of the list with all rights being transferred.

Any ideas on valuation outside of DCF. 

Rick

Answers

Jeff Taylor
Title: CFO
Company: Communications Co.
(CFO, Communications Co.) |

This must be done and done often in that industry. Are there any comps? Are there any consultants who specialize in this space who might have comps or other market data for you?

Bryan Frey
Title: VP Finance/Corp Controller
Company:
(VP Finance/Corp Controller, ) |

Along the lines of what Jeff said, I would suggest calling on your local boutique investment banks. They of all people would have visibility to smaller private transactions in this space.

Topic Expert
Jim Timmins
Title: Managing Director
Company: Teknos Associates
(Managing Director, Teknos Associates) |

The most common M&A data sources (S&P Capital IQ, Thomson Reuters, etc.) will have nothing useful about this. But there are a number of small company M&A data sources that will provide good data: Done Deals, Mid Market Comps, Mergerstat, IBA Market, BizComps, Pratt's Stats, etc.). I have seen publishing houses mentioned in some of these.

Michael Bankus
Title: Manager-Finance
Company: PNC Global Investment Servicing
(Manager-Finance, PNC Global Investment Servicing) |

I have access to these databases, if you'd like, please contact me mbankusatcomcast [dot] net

Richard Ott
Title: CFO
Company: Keystone Aerial Surveys, Inc.
(CFO, Keystone Aerial Surveys, Inc.) |

What is the remaining life of the book list? There are 3 approaches cost, market & income, at a minimum you should do the market & income approach. Have you determined the future cash flows as well as an appropritae cost of capital.The market approach uses the Relief From Royalty method, Comparable Transaction method or Comparable profit Margin method. the income method uses the Incremental Income method, Differential Income method or profit split method. There is a lot of research into valuing intangible assets.

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