US-headquartered Time Inc has been sold to rival Meredith Corporation for around $2.8bn (£2.1bn), although question marks remain over the UK arm of the business, which was put up for sale by Time earlier this year.
In September, Time Inc announced it would be putting the UK business up for sale amid falling revenues, and that a buyer would likely be announced before the year is out, but nothing has been said yet on the impact the overall sale will have on the UK division.
In the acquisition announcement yesterday (27 November), Iowa-headquartered Meredith, which owns a range of national and local magazines and radio stations, said it had made an $18.50 per share cash tender offer to acquire all of Time Inc’s shares. The offer, which incorporates $900m of Time's net debt as of 30 September, was unanimously approved by both boards and is expected to be completed during Q1 2018, subject to customary closing conditions and regulatory approvals.
In yesterday's webcast, Meredith chief executive Steve Lacy said the deal creates a $4.8bn-turnover company that generates $2.7bn in advertising revenue. The combined company's adjusted EBITDA will be $1.2bn after synergies, which are estimated be cost savings of between $400m to $500m over the first two years.
Meredith referred only to the benefits of the acquisition in terms of the combination of the two businesses in North America.
Controversy has already surrounded the deal after it emerged that it was made possible following a $650m donation from the private equity operation of the billionaire Koch brothers, who are known for using their wealth to influence conservative causes.
In the webcast, Meredith was quiet on the situation with the UK titles but said that it would “conduct further analysis to optimise the combined portfolio going forward”. Time Inc UK did not respond to PrintWeek's requests for comment.
Time Inc president and chief executive Rich Battista thanked staff for their “extraordinary work, relentless commitment and passion”.
“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,” he said.
Wyndeham Group prints Time Inc UK’s circa-50 titles, signing a sole supplier deal in June 2016 after its owner Walstead acquired Polestar’s Bicester operation. This marked a turnaround after Wyndeham had initially lost its Time Inc contract to Polestar, which was awarded a single-supplier deal in 2014. PrintWeek then revealed that Time Inc had in fact part funded the Bicester acquisition.