The Washington Post Company
) announced its intention of holding a majority interest in Celtic
Healthcare Inc. - a company engaged in home healthcare and hospice
services in the northeastern and mid-Atlantic regions. The
financial terms of the acquisition was not revealed.
WPO's step to acquire Celtic Healthcare will offer its customers
a wide range of services in the healthcare industry. Management
believes that the company is focusing on diversifying its business
into many areas having individual identity of each business, but
with a common goal and value for all.
WPO's education and publishing industry has long been grappling
mainly due to economic meltdown. The company recently posted
second-quarter financial results, in which Education division's
revenue went down 9% to $558.4 million, and Newspaper Publishing
revenue came in at $151.8 million, down 7% from the year-ago
As a result, to mitigate declining revenues and shrinking market
share, WPO is taking initiatives to diversify its business model by
adding new revenue streams for making itself less susceptible to
economic conditions. Therefore, the company's intention to acquire
Celtic Healthcare is in sync with its current strategy of operating
a diversified portfolio.
Moreover, management believes that the acquisition demonstrates
the company's focus on investing in companies that has solid
earnings prospective in the long-term along with a good management
Formed in 1877 and based in Washington, D.C., The Washington
Post Company is a diversified media and education company. Kaplan's
(company's subsidiary) strength in recent years has come from both
rapid internal growth and acquisitions.
These acquisitions include education businesses in overseas
markets (Canada, Ireland, Australia and China). We expect
Washington Post to continue the acquisition spree while focusing on
Currently, we maintain our long-term Neutral recommendation on
the stock. However, The Washington Post Company, which faces stiff
The New York Times Company
), carries a Zacks #5 Rank, implying short-term Strong Sell rating
for the next 1-3 months due to lack of any near-term catalyst.
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