23 October 2018
The sale of Time Inc. caps the end of an era in the US magazine publishing industry. Photo: Bloomberg
The sale of Time Inc. caps the end of an era in the US magazine publishing industry. Photo: Bloomberg

Meredith to buy Time Inc for US$1.85 bln

American media company Meredith Corp has reached a deal to buy renowned magazine publisher Time Inc. for US$1.85 billion in cash.

Meredith, which owns titles such as Better Homes & Gardens and Allrecipes, will pay US$18.5 a share for Time, in a deal backed by the billionaire Koch brothers, the Wall Street Journal reports.

It represents a 42 percent premium to Time’s closing share price on November 15, before reports of Meredith’s renewed interest in a deal for the New York publisher whose titles include Fortune, People and Sports Illustrated.

Including the assumption of Time’s debt, the deal is valued at US$2.8 billion.

The agreement caps the end of an era. Time Inc, whose namesake Time magazine hit the newsstands in March 1923, emerged as one of the country’s great journalistic enterprises, shaping both the political and cultural landscapes.

But in recent years, the magazine publisher lost ground as a shift among readers to digital platforms cut into traditional print revenue and a new generation of online rivals emerged, the Journal noted.

This is the third time Meredith has attempted to buy Time.

The Des Moines-based company made a run earlier this year but couldn’t secure enough financing, and Time in late April ended the sales process.

Meredith was also in talks to buy a number of Time titles in 2013 that ended with Time Warner Inc. instead spinning off Time Inc. into a separate publicly traded company.

This time around, Meredith approached Time with a fully-financed offer, including about US$600 million from a private-equity unit of the Koch brothers’ Koch Industries, the Journal said.

Time Inc. has been investing in online video and branded content, yet its print magazine circulation and advertising still account for about two-thirds of total revenue.

In the first nine months of the year, magazine revenue dropped 17 percent to US$1.3 billion, according to the report.

Stephen Lacy, Meredith’s chairman and chief executive, said the combined company will be able to reach almost 200 million consumers across all platforms, including digital.

“The vision is the absolute premiere media company in the country with premium branded content on every platform,” Lacy was quoted as saying in an interview. “We’re very excited to bring these businesses together.”

Time CEO Rich Battista said in a memo to employees that “Meredith presented us with an opportunity to combine companies to create even greater scale and financial flexibility.”

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