As officially announced on Sunday, Time Inc. will be acquired by Meredith Corporation thanks to additional funding support from the Koch Equity Development firm.
The transaction is expected to close in the first quarter of 2018, and will cost about $2.8 billion in an all-cash deal. Koch Equity Development contributed $650 million to the deal and will not have a seat on the Meredith Board and will have “no influence on Meredith’s editorial or managerial operations,” according to the terms of the agreement.
With Time Inc. reaching more than 230 million people across print and digital, and Meredith’s publications reaching more than 200 million American consumers across digital, television, print, video, mobile and social platforms, the reach of these combined companies will be staggering.
“Meredith presented us with an opportunity to combine companies to create even greater scale and financial flexibility,” wrote Time Inc.’s president and CEO Rich Battista in an internal memo. “Scale matters and will enable the enterprise to compete more effectively in this dynamic media landscape, enhancing the enormous, exciting potential of our brands.”
“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,” said Meredith’s president and COO Tom Harty.
“When you combine our strong local television business, which has grown operating profit 15 percent annually over the last five years, with the trusted, premium multiplatform content creation of Meredith and Time Inc., it creates a powerful media company serving consumers and advertisers alike,” Harty noted.
With an increased interest in television broadcasting and a stronger print and digital reach, Meredith and Time Inc. could together make waves against organizations like Sinclair Broadcast Group, which also has a looming merger with Tribune Media.
“Circulation numbers have trended down for numerous years, but we’ve been seeing good responses from publications who tend to skew toward an older audience,” said David Sandmann, a media manager with Integral Media.
“As an industry, we don’t want to see a monopoly of all these publishers merging together,” he said, “It’ll make it easier when it comes to contacts, that’s for sure.”
Sandmann also said it might give some of his clients pause if the Koch family gets more involved than what Meredith currently claims.
“There’s both a concern of too much consolidation happening, despite the massive scale of these two companies, and if publications become a political voice for one side or the other,” he said. “Let’s hope this doesn’t go down that road.”