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Atlantic Media Sells Quartz for Up to $110 Million to Japan’s Uzabase

Atlantic Media has sold Quartz, its six-year-old business news startup, to Japanese financial publisher Uzabase in a deal valuing Quartz at between $75 million to $110 million.

Under the terms of the pact announced Monday, Quartz will take over the English-language version of NewsPicks, Uzabase’s subscription-news service. NewsPicks launched in the U.S. in mid-2017 as a joint venture with Dow Jones & Co., and Tokyo-based Uzabase sees the Quartz acquisition as fueling its expansion into the U.S. and Europe.

Atlantic Media and Uzabase said they’ve been in talks about a deal for Quartz since last fall and began hammering out the terms in March 2018. The companies expect the acquisition to close in the next 30 days. The value of the deal is contingent on Quartz’s financial performance in 2018.

Quartz’s two co-presidents — editor-in-chief Kevin J. Delaney and and publisher Jay Lauf — will become co-CEOs of Quartz, reporting to Uzabase and NewsPicks founder and CEO Yusuke Umeda. Quartz will retain its name and brand and continue operating from its New York City headquarters. Currently, Quartz has 215 employees, including 100 journalists based around the world.

No layoffs are planned as part of the acquisition, and Quartz employee benefits will remain unchanged, according to a memo to staff from Delaney and Lauf. An unnamed “senior Uzabase executive” will join Quartz as CFO following the close of the deal, they said.

Privately held Atlantic Media doesn’t disclose financial results. In a presentation for investors, Uzabase disclosed that Quartz revenue rose from $18.6 million in 2015 to $30 million in 2016 — but fell 8% last year, to $27.6 million.

“While high-quality advertising will continue to represent the lion’s share of Quartz’s revenue in the coming years, we expect that the biggest source of growth in Quartz’s next chapter will come from reader revenue,” Lauf and Delaney wrote in the memo.

Launched in Japan in 2013, NewsPicks has 3.3 million registered users and 64,000 paying subscribers for its $15-per-month product in Japan. Quartz says its average audience is about 20 million unique visitors per month, spanning its website (qz.com), app, email newsletters, and video.

Atlantic Media said it will continue to provide corporate support to Quartz for at least 12 months following the acquisition. Atlantic Media chairman-owner David Bradley will continue to work with the company as a senior adviser and shareholder. Bradley, with Atlantic Media president Michael Finnegan, will continue to own and operate the privately held holding company’s other businesses, National Journal Group, Government Executive Media Group, and The Atlantic.

Separately, a year ago Laurene Powell Jobs’ Emerson Collective bought a majority stake in The Atlantic.

In his own note to Atlantic Media staff, Bradley wrote, “After selling the majority of The Atlantic to Emerson Collective, I had thought it would be a few years before we launched the search for a Quartz buyer.” But Bradley was impressed with Uzabase co-founder and CEO Yusuke Umeda’s vision and track record. “[T]he first reason for proceeding was the sense that I would be passing Quartz on to an individual and a leadership team… of exceptionally high character,” Bradley wrote. “The second reason is that Yusuke is a pure entrepreneur, an original creator of huge — and global — ambition.”

Uzabase was founded in 2008 by former investment bankers Umeda and Ryosuke Niino, along with former IT consultant Yusuke Inagaki. The company’s primary products are NewsPicks and SPEEDA, a business-to-business financial information and corporate intelligence platform. Uzabase went public in 2016 and is listed on the Tokyo Stock Exchange.

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