Dotdash buys Meredith in $2.7bn deal
A digital-age magazine giant was born on Wednesday with the announcement that Dotdash, a publishing unit of Barry Diller’s InterActiveCorp, had reached an agreement to acquire Meredith Corp, publisher of People, Better Homes & Gardens, InStyle, Entertainment Weekly, and roughly 40 other titles and digital brands.
“The purchase price is about $2.7 billion, or $42.18 per share,’’ the companies said in a joint announcement.
“If the deal goes through, the new company would be called Dotdash Meredith, and it would be led by Dotdash CEO Neil Vogel,’’ the companies said.
Joey Levin, IAC’s CEO, said in a statement that the combination of the two companies would offer uniquely engaged audiences to advertisers and partners.”
Tom Harty, CEO of Meredith, said in a statement, “We are thrilled to join forces to accelerate Meredith’s digital future.”
In an investor call Wednesday, Vogel said he was not planning on “cost synergy” — that is, lay-offs or other cuts as a result of the merger.
“Our playbook is going to drive audience, performance, and help the brands maintain their stance in the digital world that they have in the print world,” he said.
The merger would come as a hit to Des Moines, Iowa, where Meredith is a major employer. “Dotdash Meredith is to be based in New York, at Dotdash’s headquarters in the Chelsea neighborhood of Manhattan,’’ an IAC spokesperson said.
The new company would “keep a presence” in Des Moines, the spokesperson added.
Meredith was founded in 1902 by Edwin T. Meredith, later the agriculture secretary under President Woodrow Wilson, with a magazine called Successful Farming. It became a media behemoth in 2018, when it bought storied news media company Time Inc for $2.8 billion.
IAC, where Diller is chairman, is the company behind Tinder, Match and OKCupid. Its publishing unit, Dotdash, operates 14 lifestyle journalism sites, including Serious Eats and Investopedia.
Dotdash got its start in the early 1990s as website About.com and became part of IAC in 2012, when Diller bought it for $300 million from The New York Times Company.
Dotdash showed signs of change in 2019, when it bought a venerable magazine, Brides, from Condé Nast, publisher of Vogue, Vanity Fair and The New Yorker.
At the time of the expansion, Vogel said his idea for Dotdash was that it would become “what the future of Condé Nast should be.”
The acquisition of Meredith puts the company closer to realising that ambition.
Magazines have been crunched in recent years by readers’ preference for digital over print, where advertising is both less lucrative and dominated by tech companies.
Charles Whitaker, dean of the Medill School of Journalism at Northwestern University in Illinois, said that in purchasing Time Inc, Meredith had been “wildly optimistic about the extent to which acquiring those brands would create these economies of scale and synergies that would help them fend off the Googles and Facebooks of the world.”
He added, “This continued consolidation is obviously troubling. The more competition and the more companies that we have producing content, providing jobs and appealing to audiences is better for the industry.”
Meredith slimmed itself down considerably in the years since its purchase of Time Inc, shedding three prominent Time Inc titles that did not fit the company’s specialty — magazines about style, fashion, celebrity news and homemaking.
Time magazine, the flagship, went to Marc Benioff, CEO of Salesforce, and his wife, Lynne, for $190 million later in 2018. The company also sold Fortune, for $150 million, to Chatchaval Jiaravanon, a scion of a prominent Thai family, and Sports Illustrated, for $110 million, to Authentic Brands Group.
ABG later sold Sports Illustrated to TheMaven, which last month renamed itself the Arena Group.
Meredith also sold another asset it had picked up in the Time Inc deal — Time Inc UK, publisher of Woman’s Weekly and Wallpaper magazines — to London private equity firm Epiris for a reported $167 million.
In June, the company announced the sale of its local media properties, which included 17 television stations in Atlanta, Phoenix and other markets, to Gray Television in a $2.8 billion deal.
If the planned merger goes through, Dotdash Meredith would be a top-10 publisher in terms of audience size, according to internet metrics service Comscore.