Iconic US publication Time Magazine, will be part of a deal in which Iowa based publishers Meredith, will buy Time Inc. The purchase is said to be costing the Iowa-based firm $2.8 billion and will receive financial backing from the Koch brothers.
Time Inc shares closed 2.1% higher Wednesday last week, ahead of the US Thanksgiving break. Pre-market activity suggests the publisher will open in the green, Monday.
Deal in Time Inc’s ‘best interests’
Announcing the deal on its website, Time Inc was upbeat about the sale.
"Time Inc.'s Board of Directors has unanimously determined that this all-cash transaction, and the immediate, certain value it provides, is in the best interests of the Company and its shareholders,” said John Fahey, Chairman of the Board.
“Time Inc. now engages over 230 million consumers across digital and print every month through a portfolio of premium, iconic brands that are well positioned to continue to be powerful voices in media for many years to come,” added Rich Battista, President and CEO of Time Inc.
The deal comes as Time Inc has struggled with advertising revenues that have been falling since 2014. It’s 2017 third quarter earnings report showed a 9.5% decline in revenues.
Meredith secures Koch Brothers funding
Publisher Meredith, which owns Family Circle and Better Homes and Gardens, along with some local US television stations, has achieved the deal by securing a $650 million investment from Koch Equity Development.
The Koch brothers, who run the private equity group, are known for their support of economically conservative Presidents and candidates. Meredith stated, however, the Koch brothers wouldn’t have a seat on the board or any editorial input.
As expected, Meredith was positive on the deal.
“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.
“This is a transformative transaction for Meredith Corporation, and follows a fiscal 2017 in which we posted the highest revenues, profit and earnings per share in our 115-year history,” Meredith’s President and Chief Operating Officer Tom Harty, said.