Meredith to buy Time for $2.8bn in deal backed by Koch brothers
WASHINGTON: Time Inc is selling for $2.8 billion to media conglomerate Meredith Corporation, which is backed by the billionaire Koch brothers, who are known for supporting conservative causes. Time, which also publishes its eponymous magazine, Fortune, and Sports Illustrated, began looking for a buyer late last year before giving up several months later, while welcoming options. Meredith had expressed interest in buying Time earlier this year then walked away because it could not secure the necessary financing.
Time revealed in October an aggressive plan to boost revenue that included focusing less on magazine journalism and more on digital activities. Time Inc was spun off from media and entertainment giant Time Warner, which was seeking to shed its journalism assets. Meredith’s offer is for $18.50 per Time share, up about 10 percent from the shares’ closing price of $16.90 on Friday. Share prices rose over the past week on speculation over the purchase.
The boards of both companies have approved the transaction, which is due to be finalized in the first semester of 2018, Meredith said in a statement. The all-cash transaction includes about $1.7 billion for the company assets plus more than $1 billion in debt. Among the funds financing the purchase are $650 million from Koch Equity Development, a fund belonging to Charles and David Koch. The companies said the Koch unit will not have a seat on Meredith’s board and will have no influence on Meredith’s editorial or managerial operations.
The Koch brothers are two of the world’s richest men through their ownership of Koch Industries, a sprawling industrial empire that manufactures such products as Brawny paper towels, Dixie Cups and Lycra.he Kochs, known for their advocacy of conservative policies and influence on
some quarters of the Republican Party, had previously expressed interest in buying media properties such as the Los Angeles Times and the Chicago Tribune in 2013.
Their involvement in the Time deal “underscores a strong belief in Meredith’s strength as a business operator, its strategies, and its ability to unlock significant value from the Time acquisition,” according to the companies’ statement announcing the deal. Meredith said it expected the deal to close in the first three months of 2018.
When combined, the Meredith and Time brands will have a readership of 135 million people and paid circulation of nearly 60 million. The deal also will expand Meredith’s reach with internet-savvy millenials, creating a digital media business with 170 million monthly unique visitors in the United States and more than 10 billion annual video views.
“We are creating a premier media company serving nearly 200 million American consumers across industry-leading digital, television, print, video, mobile and social platforms positioned for growth,” said Meredith Corporation chairman and CEO Stephen Lacy. The transaction will create a company with a combined revenues of $4.8 billion for 2016, including $2.7 billion of total advertising revenues with nearly $700 million of digital advertising revenues. — Agencies