The many years that veteran news and information publisher Bureau of National Affairs (BNA) has been an employee-owned organization are ending with financial data and news giant Bloomberg planning to acquire the 82-year-old company, a move announced August 25, 2011. Current employees and retirees own 100% of BNA's stock, and a majority of Class A shareholders will have to approve the sale by tendering their shares.
Although Bloomberg intends to operate BNA as a separate subsidiary under the BNA name and with the current management structure in place, it also will no longer be an independent company for the first time since its founding in 1929.
Company workforce to remain unionized
Another difference is that BNA's unionized staff will be part of an organization that does not have a union. BNA employees who join its union belong to the Washington-Baltimore Newspaper Guild, which is the collective bargaining agent for the company's non-supervisory workers. Bloomberg has said the union will continue to represent BNA staff and it will keep the existing work contract in effect which runs through February 28, 2013.
BNA's focus has long been as a Washington-based source of regulatory, policy, legal, tax, accounting, labor, employment, healthcare, environmental, trade, financial, intellectual property, and telecommunications information and analysis for government, legal, tax, and business professionals.
Most subscribers to BNA newsletters receive them online with the company additionally developing digital libraries of material on many of the subjects it covers. One of Bloomberg's objectives now is to have access to BNA content.
"For the employees BNA will be joining a company that's growing and that's hiring, a company that's looking more for valuable assets and talent to help them grow in key markets," BNA Chairman and CEO Paul Wojcik told an employee meeting on the acquisition August 29.
Bloomberg purchase would add technological resources to BNA products
He noted that BNA has built a strong brand name and reputation over the years for providing quality information. But being under the Bloomberg fold will mean a new platform as part of a bigger firm with greater financial resources and technological capabilities, Wojcik added.
BNA, headquartered in Arlington, Virginia, reported $331 million in revenue for 2010. Privately held Bloomberg L.P., based in New York City and founded by New York Mayor Michael Bloomberg, has estimated revenue of nearly $7 billion.
Bloomberg is paying $990 million for BNA. Bloomberg has made a cash tender offer to purchase all outstanding BNA shares for $39.50 a share. The existing employee ownership, which first began in 1947, is expected to bring a premium for shareholders who have worked at BNA for several years.
Shareholders who object to the acquisition can show their opposition by not returning their shares. If the tender offer is accepted, untended BNA shares most likely will be converted in the deal to receive the same $39.50 per share price from Bloomberg.
"The acquisition is a big shift in several ways. In its roughly 30-year history, the Bloomberg enterprise has built rather than bought its powerful position as a supplier of information to bankers and traders, a sector now worth $16 billion a year, according to McGraw-Hill. Bloomberg cashed in on the extraordinary boom years when the industry's growth outpaced gross domestic product, but it now faces a prolonged slowdown as financial institutions pare back," Jeffrey Goldfarb and Quentin Webb wrote in "A Big Purchase for Bloomberg" in the August 25, 2011 New York Times.
Bloomberg moves into government and regulatory coverage
Even before the sale was announced, Bloomberg had begun expanding into new markets when it started Bloomberg Government, or BGov.com, focusing on governmental policy and regulatory news and data.
The company's other Washington divisions include Bloomberg News and Bloomberg Law. Acquiring BNA is expected to help Bloomberg Law pursue the legal and regulatory information markets, where it needs more proprietary content to compete with Thomson Reuters' Westlaw and Reed Elsevier's Lexis Nexis services.
Bloomberg's most prominent previous acquisition was in 2009 when it bought BusinessWeek magazine, since renamed Bloomberg BusinessWeek.
The purchase of BNA requires regulatory approval of the U.S. Department of Justice and the Federal Trade Commission. Wojcik noted that little market overlap exists between both companies as BNA produces products and news services that are distinctly different from Bloomberg's and aimed at different markets.
While Bloomberg has specialized in more immediate financial data for use in investment decisions, BNA is best known for its more extensive and long-term analysis of governmental policy and legislation for an audience of attorneys and lobbyists.
BNA employees told to expect only minimal changes
Bloomberg officials have told the BNA workforce they will largely keep the same jobs and titles, with no layoffs in the short term anticipated in what's described as a "gradual, modest consolidation," though that could mean some BNA employees deciding on their own to leave.
The BNA staff will remain in the same offices in Arlington where the company moved in August 2007 after being located in downtown Washington since its inception.
The issue of differences in work cultures has been raised by some BNA employees in terms of the need for any adjustments later on. BNA management has said to expect no major changes for the time being.
Bloomberg officials have indicated the Bloomberg name might be attached to the BNA subsidiary at some future point, similar to the renaming of BusinessWeek. Whether BNA could eventually be brought within the company structure remains an unanswered question as does what, if anything, may occur after the expiration of the current work contract.
Sources:
- BNA and Bloomberg Websites
- Jeffrey Goldfarb and Quentin Webb, "A Big Purchase for Bloomberg," New York Times, August 25, 2011
- Shane Harris, "Is Bloomberg Government the Next Washington Media Death Star?" The Washingtonian, March 2011
John Seidenberg - John Seidenberg has worked on newspapers, newsletters, radio news, and produced specialized news publications as well as freelance ...
