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Tech publisher IDG to be bought by Chinese conglomerate

Patrick McGovern published the first edition of Computerworld in 1967.IDG

On the surface, International Data Group’s sale to a Chinese conglomerate and investment firm looks like one more example of faceless foreign owners snapping up a US company, a trend that has hit record highs in recent years.

But China is very familiar territory for IDG, which launched a Chinese version of its flagship magazine, Computerworld, in 1980, soon after the United States reestablished diplomatic relations with the once-isolationist country.

And IDG’s new owners include a China-based venture firm started by IDG founder Patrick McGovern, who made some 130 trips to the country in his career.

Put together, those factors made the sale something closer to keeping the pioneering publisher within the family, company officials said. That could be heartening news for IDG’s thousands of employees, who have wondered about the privately controlled company’s future since McGovern’s death in 2014.


“This may be the best alternative to an equity bank coming in and raping and pillaging the place. The IDG culture doesn’t get lost,” said John Dodge, a former IDG editor.

IDG publishes some of the best-known titles in the tech industry, including Macworld, and has a powerful market research arm. Its new owners are a partnership between China Oceanwide Holdings Group and IDG Capital, a China-based investment firm that McGovern started in the early 1990s.

China Oceanwide will take a controlling stake in IDG’s publishing and tech research businesses, known as International Data Corp., with IDG Capital holding a minority position. Meanwhile, IDG Capital will become the majority owner of IDG’s investment subsidiary, IDG Ventures, with China Oceanwide holding a minority stake.

Terms of the all-cash deal were not disclosed. The Wall Street Journal, citing an anonymous source, reported the price was less than $1 billion.

Company officials said the new ownership plans to continue expanding the business, which will retain its Boston headquarters and current management team.


The net proceeds will benefit the McGovern Foundation, which supports neuroscience and IT causes.

The shared ownership structure was arranged after IDG Capital and China Oceanwide separately approached the IDG board with offers late in the sale process, IDG chairman Walter Boyd said Wednesday.

IDG officials were considering “four or five” other offers, Boyd said. But the IDG Capital and China Oceanwide partnership was particularly appealing because of the involvement of Hugo Shong, a longtime IDG executive who founded IDG Capital with McGovern in 1993.

“This was obviously the one that intrigued us the most, and no small part of that was the fact that part of our future could be entrusted to somebody like Hugo,” Boyd said. “That gave us a great sense of satisfaction, knowing that we could continue Pat’s legacy.”

China Oceanwide is a privately held, multibillion-dollar company founded by its chairman, Zhiqiang Lu. It has a stake in the personal computer maker Lenovo, and last year paid about $2.7 billion to acquire Genworth Financial, a large provider of long-term care insurance that was spun off by General Electric Co. in 2004. It owns real estate in New York, San Francisco, Los Angeles, and Hawaii.

Chinese corporate buyers spent $63.6 billion on mergers and acquisitions of US companies last year, a dramatic rise from the $11.9 billion seen a year earlier, according to Mergermarket, a research firm. That was part of a record $450.5 billion worth of foreign acquisitions last year, the firm said.


IDG and its buyers said the deal already had been approved by federal regulators.

McGovern was a pioneer in the computer trade press. He published the first issue of Computerworld in 1967 and grew IDG to encompass hundreds of tech-focused titles and websites around the world. He also was an early and enthusiastic investor in China, expanding IDG’s footprint to include more than 60 joint-venture publications along with its investment activities.

Shong, chairman of IDG Greater China and a trustee of Boston University, was a key part of IDG’s growth in his home country. Shong also was personally close to McGovern and helped pay for a sculpture that adorns the entrance of the McGovern Institute for Brain Research at MIT, an initiative backed by a $350 million gift from McGovern and his wife, Lore.

That familiarity is a good sign for IDG employees, Dodge said, even as the company grapples with the difficulty of moving from a print-magazine business to one built on cheaper digital advertising.

“They were very, very tight. I think if you’re going to preserve the IDG culture with somebody who really understands it, it’s Hugo,” Dodge said. “That’s not to say they’re flush with cash. They’ve experienced the same retrenchment many publishers have.”

IDG has laid off staff in recent years and between 2013 and 2014 ended the print runs of PCWorld, Computerworld, and Macworld, which continue as Web publications. But niche tech publishers can still build good businesses, particularly if they employ digital analytics that can identify likely buyers, said John Prunier, a partner at Petsky Prunier, a New York investment bank that is involved in media deals.

Companies like China Oceanwide also tend to value media brands because they can add a certain cachet to a company’s holdings, he said.


“Media assets share a certain commonality with trophy real estate assets for Chinese buyers,” Prunier said. “Even though IDG itself is probably not a household name, some of the assets that they possess are.”

Curt Woodward can be reached at curt.woodward@globe.com. Follow him on Twitter @curtwoodward.