HPC

Chinese investors gobble up owner of PCWorld, Macworld etc

IDG into the hands of the Middle Kingdom – except its HPC bit


Two Chinese investors are buying the owner of PCWorld magazine and the IDC market research outfit International Data Group (IDG) – but IDC’s high-performance computing research businesses are not included in the sale.

The two Chinese investors are China Oceanwide Holdings Group Co, Ltd and the confusingly named IDG Capital. They were apparently bidding separately several months ago, but joined forces under the encouragement of Goldman Sachs, IDG’s banker.

They are paying a sum estimated between $500m and $1bn. The American Committee on Foreign Investment in the United States (CFIUS) has cleared the sale, which should complete by April.

IDG claims it is the number one tech media group in the world, with operations in 97 countries. Its media brands include CIO, Computerworld, PCWorld, Macworld and more with a zillion associated events, such as CIO round tables and perspectives. It is headquartered in Boston and was founded by Pat McGovern in 1964, and who died in 2014. McGovern made 130 trips to China during his career.

China Oceanwide is an international conglomerate active in financial services, real estate assets, media, technology and other strategic investment areas. It was founded by its chairman, Zhiqiang Lu.

IDG Capital was founded by Hugo Shong, and was previously named IDG Capital Partners. It says it was the first firm to bring foreign venture capital into China. It says it represents private equity and venture capital fund managers, investment advisors and other business entities, and has focused on Chinese technology investments since the early 1990s.

IDG was one of its contributors and, in 2014, IDG Capital Partners had more than 300 companies in its portfolio, being an early-stage investor in many Chinese market leaders, including Baidu, Tencent, Qihoo 360, Sohu, Soufun, Ctrip, Kingdee, 91 Wireless, Xiaomi and CreditEase. Now this inward-looking fund is looking to expand outside China and, with Oceanwide Holdings’ help, purchase one of its original contributing partners.

China Oceanwide’s Zhiqiang Lu gushed: “As a world leader in market research and insights, a publisher of many of the tech industry’s most established media brands, and a successful venture investor, IDG’s strong global brand and profile make for an attractive strategic investment for us.

“We plan to support IDG’s current management team as they implement their business plans, providing them with the autonomy, financial support and commercial resources that can support IDG’s growth and expansion and further enhance its leading position in the market.”

Why is the high-performance computing (HPC) business, which includes HPC research and HPC forums, not included? In its research it is said to be exposed to sensitive US and other national government supercomputing and HPC data. So it will be spun off into a separately owned US entity independent from the two Chinese IDG buyers. When the deal closes, HPC Reports will be issued by the HPC User Forum.

No valuation has been published for IDC’s HPC business. Analyst Earl Joseph is IDC’s program VP for HPC and executive director of the HPC User Forum. Interested parties, such as large and worthy US media operations with blue chip US gov credentials, should get in touch with him or Goldman Sachs.

IDG will remain in its Boston headquarters, run by president and CEO Kirk Campbell and IDG Communications CEO Michael Friedenberg. ®


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