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Time Will Sell SAMI-Burke to Control Data

October 14, 1987|Associated Press

NEW YORK — Time Inc. announced an agreement Tuesday to sell its market research unit to Control Data for about $80 million in cash and additional payments based on the unit's future revenue.

Time said the sale of SAMI-Burke Inc. should enable it to concentrate on its core businesses, which include magazine and book publishing and cable-television systems and programming.

Control Data, based in Minneapolis, said the acquisition moves it closer to its goal of becoming "a full-service marketing information resource for advertisers and the media." It already owns Arbitron Ratings Co., which measures local television and radio audiences.

SAMI-Burke gathers information about the size and sales patterns in a range of markets and sells the information to advertisers, many of whom depend heavily on advertising and promotions for selling products at supermarkets.

The transaction, which is expected to be completed by the end of the year, is subject to the approval of the boards of both companies and the execution of a definitive agreement.

Separately, Time reported that its net income fell to $74 million in the third quarter from $252 million a year earlier, but the 1986 figure included a one-time $351-million gain from sale of stock in its cable-television company and its interest in a forest products company. Operating income was up 78%, and revenue rose 17% to $1.07 billion.

Restructuring Firm

John Reidy, who follows media stocks for the investment firm Drexel Burnham Lambert Inc., said Time's sale of SAMI-Burke was not a surprise, since it was outside Time's core businesses.

Restructuring Company

Time had acknowledged that much in recent months, and rumors had circulated that it was looking for a prospective buyer.

Over the past 18 months, Time management has been restructuring the company, spinning off part of its interest in a cable-television system, selling its stake in a forest products concern, acquiring a textbook company and imposing cost controls at the corporate level and at its magazine unit.

"The sale of SAMI-Burke is a strategic move advantageous to all parties," said Gerald M. Levin, executive vice president of Time.

David P. White, who is president of Control Data's business services group, said his company felt it was "bringing together the innovators in market and media research."

He said customers wanted a single source of information for what consumers buy and what media and marketing activities influence buying decisions.

Joined Forces Earlier

White said SAMI-Burke controls about a third of the $350-million market in product movement research. He said its main competitors include A. C. Nielsen Co., which is owned by Dun & Bradstreet Corp., and Information Resources Inc., based in Waltham, Mass.

Time founded the predecessor to SAMI-Burke, Selling Areas-Marketing Inc., in 1966. It bought Burke Marketing Services Inc. in early 1986 and merged it with SAMI. Control Data held a 40% stake in Burke before the sale.

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