McGraw-Hill, owner of Standard & Poor's and Business Week magazine, plans to buy auto-market research firm J. D. Power & Associates to...
McGraw-Hill, owner of Standard & Poor’s and Business Week magazine, plans to buy auto-market research firm J.D. Power & Associates to help loosen the company’s dependence on advertising sales.
Stephen Goodall will remain as J.D. Power’s president, New York-based McGraw-Hill said in a statement yesterday. Closely held J.D. Power, which is known for its customer surveys about automobile quality, was founded in 1968 and has 787 employees. Terms of the agreement weren’t disclosed.
McGraw-Hill Chief Executive Harold “Terry” McGraw is steering his company, which also publishes industry magazines and owns television stations, into businesses with more-reliable sources of revenue than ad sales. McGraw-Hill last week said it acquired closely held Vista Research, which provides institutional money managers with industry experts, for an undisclosed price.
“What they are doing is buying a good brand name,” said Edward Atorino, an analyst with Fulcrum Global Partners in New York, who rates McGraw-Hill “buy” and doesn’t own the shares. “A lot of J.D. Power is subscription-based, which is less cyclical than advertising.”
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Based in the Los Angeles suburb Westlake Village, Calif., J.D. Power analyses consumer preferences and satisfaction. The company provides auto-industry data, including global sales and production forecasts for light vehicles and heavy trucks, to governments and investors. It also provides data on industries including finance, insurance and homebuilding.
Sales were $145 million in 2003, according to Hoover’s Web site.
Adding J.D. Power “will significantly strengthen our core business-information platform by providing a new direct link to consumers,” said Scott Marden, president of McGraw-Hill’s information and media-services unit, in the statement.
Marden’s unit, which includes Business Week, accounted for $119.3 million of the company’s $1.2 billion in operating profit last year.
McGraw-Hill shares fell 51 cents to $95.40 yesterday. The stock is up 24 percent in the past 12 months.