German media giant Bertelsmann said Wednesday it was planning a buying spree after its net profit soared in 2006. But the company said it would wait until 2008 to make new acquisitions in order to give itself time to absorb the cost of a share buy-back that pushed up its debt.
"The group plans to hold back until the end of 2007," Bertelsmann said in a statement. "At that point, we will again have financial scope of between 1.2 and 1.5 billion euros per year (1.6 and 2.0 billion dollars) for acquisitions and 700 million euros for other ongoing investments," the group's CEO, Thomas Rabe, said.
Rabe announced that the company planned to create an investment fund worth one billion euros with Morgan Stanley to finance the acquisition of stakes in private equity companies.
Bertelsmann last year bought back 25.1 percent of its capital from GBL, the holding company of Belgian financier Albert Frere.
The transaction was financed by the sale of BMG Music Publishing, whose roster includes musicians such as Justin Timberlake and Coldplay, to Vivendi for 1.63 billion euros.
This sale provided a strong boost for Bertelsmann's 2006 financial results. Net profits more than doubled to 2.424 billion euros and turnover increased by 7.9 percent to 19.3 billion euros. The group said it aimed to see both its profit and turnover increase further this year.