Time Inc. has agreed to be bought by major multiplatform publisher Meredith Corporation
Today we’re reporting on a major publishing acquisition involving a couple of major multiplatform publishers; The acquisition of Time Inc. by Meredith Corporation. We also look at some thoughts on what this means within the greater magazine publishing industry.
The New York Times reports, “A long chapter in media history came to an unlikely close on Sunday night with a sale agreement for Time Inc., the publisher of once-prestigious magazine titles including Time, Sports Illustrated and People.”
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“The Meredith Corporation — the owner of Family Circle, Better Homes and Gardens and AllRecipes — agreed to purchase Time Inc. in an all-cash transaction valued at nearly $3 billion. The deal was made possible, in part, by an infusion of $650 million from the private equity arm of Charles G. and David H. Koch, the billionaire brothers known for using their wealth and political connections to advance conservative causes.”
Time Inc. has had trouble growing where Meredith has not. The article continues by looking at that notion, and how this deal, which has been a possibility since 2013, came together now. “…as Meredith has stood relatively strong, Time Inc. has stumbled. The company failed to keep pace as the industrywide transformation from print to digital rendered old methods of magazine-making obsolete and publishing companies crumbled under the pressure of declines in print advertising and circulation.”
“A deal between Meredith and Time Inc. fell apart in 2013 after Meredith reportedly said that it did not want to acquire some of Time Inc.’s best-known titles, including Time, Fortune and Sports Illustrated. Meredith also expressed interest in buying Time Inc. earlier this year before it walked away — in part because it could not secure sufficient financing. The Kochs helped the company overcome that problem.”
With the acquisition of multiplatform publisher Time Inc., Meredith corporation has many new opportunities ahead of itself, as well as some potential challenges. “Adding Time Inc.’s portfolio will give Meredith even more national scale, which will help it continue to appeal to advertisers on both the print and digital sides. But the company will also have to adjust to printing weekly titles, which it currently does not do. Meredith said it expected its deal for Time Inc. would result in $400 million to $500 million in cost savings in its first two years.”
This sale takes place even after Time Inc. attempted to reverse the organization’s direction by hiring Rich Battista and Jen Wong. “Mr. Battista, who was named Time Inc.’s chief executive last year, and the new chief operating officer, Jen Wong, embarked on an aggressive strategy to increase digital revenue, including enhancing advertising technology capabilities and offering customers paid services, such as insurance for pets and a food and wine club. The company had also earmarked $400 million in cost cuts.”
The finalizing of this deal is expected early next year. “Under the terms of the deal, Meredith will pay $18.50 a share for Time Inc. The boards of both companies finalized the deal on Sunday evening. The deal is expected to close in the first quarter of 2018.”
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