Cycling Weekly parent bought in $1.8 billion deal combining two publishing giants
The publisher of Cycling Weekly, Time Inc, is to be purchased by the Meredith Corporation in a $1.8 billion deal that pairs two magazine giants.
$650 million of the equity raised stems from Conservative billionaires the Koch brothers (Koch Equity Development), something that has already lead Meredith to play down their involvement. Fears have been raised that the source of the funding could be of a political interest, however Meredith claims that there will be no seat on the board as a result of the funding and that editorial will remain out of reach of influence.
“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 M. Lacy. “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. 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.”
Time Inc announced in June last year that it would slim down its cycling portfolio to focus on the flagship title Cycling Weekly.
The transaction will create a diversified media and marketing company with calendar 2016 combined revenues of $4.8 billion – including $2.7 billion of total advertising revenues with nearly $700 million of digital advertising revenues – and adjusted EBITDA of $800 million. Additionally, Meredith anticipates generating cost synergies of $400 million to $500 million in the first full two years of operation.
Meredith isn’t just big in print. The publishing giant has a portfolio of 17 television stations in 12 markets, which reach an estimated 11% of U.S. households TVs.
The move to merge the companies has pushed the publisher up the ranks, enabling it to now take a place in the top ten digital media companies globally.
Under the terms of the agreement, Meredith will commence a tender offer to acquire all the issued and outstanding shares of Time Inc. common stock for $18.50 per share in cash.
The transaction is subject to customary closing conditions and regulatory approvals, including the tender of a majority of the outstanding shares of Time Inc. common stock and clearance under the Hart-Scott-Rodino Antitrust Improvements Act.
The transaction is expected to close during the first quarter of calendar 2018.
