Days after after saying it would jettison Every Day with Rachael Ray, Reader’s Digest Association said it’s exploring a sale of a second key food property, AllRecipes.com.
Allrecipes has been seen as a candidate for a sale for at least a year. RDA bought the user-generated recipe site in 2006, and since then, it’s more than doubled its traffic to become one of the biggest food sites on the Web. Allrecipes would be expected to fetch a high price, and selling it could help RDA patch financial weaknesses elsewhere at the company.
RDA CEO Robert Guth, who'd said when he was appointed that he would identify parts of the company to sell off, said the Allrecipes announcement fits with his strategy to focus on RDA’s core brands like Reader’s Digest, Taste of Home, and The Family Handyman.
RDA said Morgan Stanley and Evercore Partners are advising it in pursuing the possible sale.
As for Rachael Ray, talks continue with Meredith Corp., which agreed in principle to buy the assets of the magazine. The deal is said to be nearing completion. Meredith is believed to be paying somewhere in the neighborhood of $5 million for Rachael Ray, which went from being RDA’s crown jewel to heading towards a loss of a reported $10 million this year.
The announcement came as something of a surprise, given Rachael Ray was once a shining star at the company until competition from Food Network Magazine and other food media had it on the run.