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 | |
| Public | |
| Traded as | NYSE: MDP S&P 400 Component |
| Industry | Media |
| Founded | 1902 |
| Founder | Edwin T. Meredith |
| Headquarters | Des Moines, Iowa |
Key people | Steve Lacy (Chairman and CEO) Tom Harty (President and COO) |
| Products | Newspapers Magazines Television Educational Services Websites |
| Revenue | US$1.6 billion(2016)[1] |
Number of employees | 3,600 (2016)[1] |
| Divisions | National Media Local Media |
| Website | www |
The Meredith Corporation is an American media conglomeratebased in Des Moines, Iowa, USA. The company has two divisions: National Media and Local Media.
As of 2016, the company employs 3,600 people and has US$1.6billion in revenues.
Meredith Corp. Acquires Time Inc. in $2.8 Billion Koch Brothers-Backed Deal
CREDIT: AP/REX/SHUTTERSTOCK
Meredith Corp., a magazine publisher and broadcast company, will acquire Time Inc. in a deal totaling $2.8 billion, the company announced Sunday. The all-cash transaction is backed by an affiliate of Koch Industries, headed by the controversial billionaire brothers Charles and David Koch.
Des Moines, Iowa-based Meredith said in the statement the deal had been approved by both firms’ boards of directors and is expected to close in the first quarter. Meredith will pay $18.50 per share of the publicly traded Time Inc., a 46% premium over the closing price on Nov. 15, before reports of the acquisition surfaced.
Meredith chairman-CEO Stephen Lacy emphasized that the combined reach of the two companies would exceed 200 million consumers. The enlarged company would generate about $4.8 billion and adjust earnings of $800 million. Meredith said it expects to generate $400 million-$500 million of savings from streamlining operations during the first two years.
“We are adding the rich content-creation capabilities of some of the media industry’s strongest national brands to a powerful local television business that is generating record earnings, offering advertisers and marketers unparalleled reach to American adults,” Lacy said. “We are also creating a powerful digital media business with 170 million monthly unique visitors in the U.S. and over 10 billion annual video views, enhancing Meredith’s leadership position in reaching millennials.”
Meredith’s deal is backed by $650 million from Koch Equity Development, the investment arm of Koch Industries, an industrial conglomerate rooted in the oil and gas business. According to Meredith, KED will not have a seat on its board, and will have “no influence on Meredith’s editorial or managerial operations.”
The Koch brothers have become controversial figures for their lavish spending to back political candidates and causes, most of them conservative. By some estimates the pair spent nearly $1 billion during the 2016 federal election cycle. There is speculation that the brothers are diversifying their investments into media to have greater influence in culture and shaping popular opinion on issues such as tax policy and climate change.
KED has “deployed in excess of $8 billion of industry agnostic principal investments over the last five years,” Meredith said in announcing the deal.
As part of the transaction, Time Inc. CEO Rich Battista will step down once the deal is completed. He took the helm as Time Inc. CEO in September 2016. He joined Time Inc. as head of People and Entertainment Weekly in March 2015.
“I am proud of our accomplishments and thank the talented teams across the company for their extraordinary work, relentless commitment, and passion,” Battista said. “Together, we moved quickly and successfully to launch, grow, and advance our multi-platform offerings during unprecedented times in the media sector.”
The two companies had several rounds of acquisition talks in recent years, but were never able to come to a conclusive deal. Meredith’s best-known brands are Better Homes and Gardens and Family Circle, while New York-based Time Inc. is the home of Time magazine, Entertainment Weekly, People, Sports Illustrated, and Fortune.
The acquisition comes at a time when the print magazine business that Time Inc. helped build is struggling to retain readers and advertisers. Time Inc. earlier this month reported a 9% decrease in its revenue year-over-year for the third quarter and a 12% drop in advertising and circulation revenue.
Time Inc. was valued at about $4 billion in June 2014 when it was spun off from Time Warner. The 1989 merger of Time Inc. and Warner Communications helped usher in the era of mega media conglomerates.