On Sunday, US Media company Meredith announced it will buy Time Inc., also known as the publisher of Fortune, Sports Illustrated and People magazines.
One of the biggest partnership in the media history was announced on Sunday night with a sale agreement for Time Inc,. The Meredith Corporation agreed to buy the publishing group in a transaction that values approximately $1.84 billion, and is backed by conservative billionaire brothers, Charles and David Koch.
Because of the joint agreement between two giant media companies, the deal is called “a transformative and financially compelling growth opportunity”. Meredith will pay $18.50 per share in cash for the magazine’s nearly 100 million outstanding shares. It is said that using $3.55 billion in commitments from a diversified lenders and a $650 million preferred equity from an investment arm of Koch Industries, Koch Equity Development will help finance the deal and pay down existing debt.
Prior to the announcement, Meredith had just $28 million in cash on hand, according to its latest quarterly report. Time CEO, Rich Battista says that during the transition period, he’ll continue working with Meredith, he’ll resign after then.
The publisher of Time and People magazines was temporarily closed on Sunday on an agreement to sell itself to the Meredith Corporation.
Stephen Lacy, Meredith Chief Executive comments in their statement,
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.
Time Inc.’s financial advisers for the procedure are Morgan Stanley and Bank of America Corp. BDT & Co. and Moelis & Co. are advising Meredith as well. The buying process will run in the first-three months of 2018. The deal will expand Meredith’s reach with new-gen as known as millenials, creating a digital media business with 170 million monthly unique visitors in the United States and more than 10 billion annual video views.
Lastly, after the buying process is completed, one of the main purposes of Meredith is to impress advertisers’ decisions as efficient as Google and Facebook.
So, traditional Time has finally moved to digital after Meredith’s third attempt of buying the publishing group.