The Strategist

Meredith Corp. to pay nearly $ 3 billion for Time Inc.

11/27/2017 - 11:46

American media company Meredith Corp is buying Time Inc, publisher of the magazines People, Sports Illustrated and Fortune. Meredith is going to pay $ 1.84 billion in cash with the support of billionaires brothers Charles and David Koch, writes Reuters.

Meredith Corp. to pay nearly $ 3 billion for Time Inc.
Meredith is acquiring shares of Time at a price of $ 18.50 per share in cash. Taking into account the debt, the value of the transaction for the purchase of Time will be $ 2.8 billion. According to Meredith, elimination of duplicate operations in the two companies will save $ 400 million to $ 500 million for the first two full years of operation.

Meredith expects the deal to be closed in the first quarter of 2018.

Earlier it was reported that Meredith led unsuccessful negotiations on the purchase of Time earlier this year. The media company also showed interest in acquiring Time Inc. in 2013.

Meredith, which owns magazines Better Homes & Gardens and Family Circle, will receive news, business and sports brands as a result of the transaction, writes Reuters. According to analysts, this can give Meredith the scale necessary to bring the broadcasting division into a separate company.

As a result of transaction, the total audience of the Meredith and Time’s readers will amount to 135 million people, the circulation will number 60 million. The deal will also expand Meredith’s audience by creating a digital media business with 170 million unique visitors a month in the US and more than 10 billion video views a year.

Koch Equity Development, the private investment fund of the Koch brothers, agreed to offer Meredith $ 650 million for the acquisition of Time. The companies said that representatives of the fund will not take place on the board of directors of Meredith and will not affect the editorial or management activities of Meredith.

Charles and David Koch, known for their protection of conservative politics and influence on some circles in the Republican Party, have already expressed interest in buying media assets, such as Los Angeles Times and the Chicago Tribune back in 2013.

Their involvement in the deal with Time "highlights the firm belief in the power of Meredith ... its strategy and its ability to derive significant benefits from the acquisition of Time," follows from the statement of the companies.

Meredith also said it will continue to pay its current annual dividend of $ 2.08 per share and expects an increase in annual dividends.