Future Publishing (LSE: FUTR) has sold off its loss-making New York operation – home to magazines including Guitar World, Revolver and Guitar Aficionado – in a deal worth $3m (£1.9m).
Future, which is aiming to reduce its exposure in the US after the division slumped to a $5.6m loss last year, has sold the New York operation to NewBay Media.
NewBay, which is headquartered in New York and owned by private equity firm the Wicks Group, owns dozens of magazines, websites and several national events serving the music and broadcast industry.
NewBay has acquired Future’s assets, referred to by Future as its New York music division, which also includes a licence to operate the Golden Gods Awards show.
Future said that the division made a pre-tax loss of £3.8m and revenue of £8.5m in the year to 30 September.
The company has acquired the business for an initial payment of $2.6m in cash on completion of the deal. This is followed by $150,000 in cash on 30 September, and $250,000 cash in the third quarter this year “based on the achievement of certain operational targets”.
Future said it will use the cash from the sale to continue to restucture of its remaining US operation – which includes about nine further magazines, an office in San Francisco and profitable digital businesses such as the Techradar website – which employs about 200 staff.
Once the sale is completed Future said it will then sell its New York property.
“The sale represents a big step forward in our strategy to streamline our US business and return it to profitability by 2013,” said Mark Wood, the chief executive of Future Publishing.
“The merger of our mainstream US operations and our UK business is on track, and we are making good progress in reducing costs.”
The embattled publisher, which dramatically axed its chief executive Stevie Spring and finance chief John Bowman late last year to save almost £1m a year, saw a total £5.5m profit in 2010 turn into a £19.3m loss.
In the year to 30 September, Future’s total US operation made $62.4m in revenues. The San Francisco operation is the primary hub, employing 165 people.
This article originally appeared in MediaGuardian.