UPDATE: Meredith Corp announces deal to acquire Time Inc for nearly $3 billion. The deal is expected to close in the first quarter of 2018. Time Inc CEO Rich Battista will stay on until the deal closes. Meredith says the Koch Brothers who kicked in $650 million to get the deal done, will not have a seat on the board and will not have any input in editorial, management or operations.
Said Mr. Battista in an email to Time Inc employees:
I believe in our strategic transformation plan and in our ability to write the next great chapter of this storied company. As a publicly traded company, and one operating in such a dynamic industry as media, we know circumstances can change quickly. Meredith presented us with an opportunity to combine companies to create even greater scale and financial flexibility.
Said Meredith President & COO Tom Harty:
This is a transformative transaction for Meredith Corporation
While most of us were busy eating Thanksgiving leftovers and decorating for the Holidays, the boards of Time Inc and Meredith were meeting to finalize an agreement for Meredith, the low key Iowa based media company and publisher of magazines like Better Homes & Gardens and Family Circle to acquire Time Inc, the publisher of Iconic magazines like Time and People for about $2 billion. Meredith’s Koch brothers backed acquisition of Time Inc will reduce the number of major U.S. based magazine publishers to three, Conde Nast, Hearst and Meredith with the latter two being the biggest in the world and mark a victory long pursued by Meredith to get its hands on Time Inc. It is believed a deal could be announced as early as Monday morning which will surely dominate the week in media industry circles. Just last month, Hearst agreed to acquire Rodale in a much smaller deal. There is no word yet on how Time Inc being acquired will affect its work force or even its senior management. But no one expects Time Inc to continue as a unit of Meredith with its own leadership which means Time Inc’s current CEO Rich Battista and COO Jen Wong will likely both be moving on after the deal closes.
When Time Inc was pushed off on its own in 2014, the company set out to prove itself as a standalone business without a mother ship to hide behind. For years as part of Time Warner, Time Inc’s performance and earnings were never broken out so when it started to share this information as a public company, people were stunned. Since its debut as a standalone business, Time Inc has struggled and continues to struggle today to keep up with ever shifting consumer habits and the digital landscape. Over the past year the company has been throwing different things at the wall to see what sticks. Some have stuck and some fell flat. Under former CEO Joe Ripp, the company began to beef up its digital offerings by scooping up digital brands like XOjane and launching new digital brands like TheSnug. XOJane didn’t really catch on for the company and has since been folded and TheSnug was quietly shuttered back in 2016. Under Rich Battista, its been pretty much the same strategy but with a twist. In addition to launching new digital products, Time Inc has been rolling out brand extensions like Real Simple Clean, Real Simple Style and entering new areas of business with the launch PetHero to name a few. Before news broke that Meredith was again pursuing the company this time with the deep pocketed backing of the Koch brothers, Time Inc’s stock fell so low that its valuation almost fell below $1 billion. No one knows what has changed since billionaire Edgar Bronfman made a similar offer for Time Inc last year or since the company decided not to sell earlier this year. Perhaps their favorite to sell to all along was Meredith, but Meredith kept coming up short. Now with backing from the Koch brothers which is said to be causing some pause among Time Inc’s editorial brass, Time Inc is ready to move forward. We are about to witness the end of an era. Its cliche, but its true.
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