IAC's Dotdash to Acquire Meredith in $2.7 Billion Deal

Dotdash, the digital publisher owned by IAC, announced Wednesday evening that it has reached an agreement to acquire Meredith Corp., a holding company whose titles include iconic properties like People, Southern Living and Better Homes & Gardens. Dotdash will purchase Meredith at a price of $42.18 per share, representing a total transaction cost of $2.7 billion, which will be funded by cash and up to $1.6 billion of debt, according to its investor deck. The merger aims to close by Dec. 1. "We've often found opportunities in the digital transformations of businesses and industries: travel, ticketing, dating, home services and now publishing,” said Joey Levin, CEO of IAC, in a statement. “Meredith is already seeing record digital growth and we think Dotdash can help accelerate that growth." Expanding reach, data and revenue The deal promises to significantly expand the reach of both publishing groups, allowing the resulting company, called Dotdash Meredith, to reach a combined 175 million monthly users, including 95% of U.S. women, according to a representative. Its scale will allow it to compete more evenly with social media platforms and its rapidly consolidating media peers. Meredith Bets Big on Video and Podcasts in NewFronts Presentation The new company will be run by Dotdash CEO Neil Vogel, though the company declined to answer whether the merger would result in layoffs. A representative told Adweek that the question was “not our focus right now.” Independently, Dotdash has accrued 17 consecutive quarters of double-digit revenue growth, an accomplishment it has achieved, in part, by cultivating a portfolio of brands designed to provide authoritative answers to search-based inquiries. Its 14 titles include publications such as Verywell, Investopedia and Simply Recipes, whose evergreen content and lightweight design have been optimized to rank highly in search engine results. By partnering with Meredith, Dotdash gains access to a stable of more than 40 brands with 120 years of cultural authority, strong advertising relationships, opportunities for revenue diversification and an expanded pool of first-party data. Over the last 12 months, the combined company would have generated an advertising revenue of more than $1 billion and more than $1 billion in ecommerce sales, according to a representative. By 2023, Dotdash Meredith expects its adjusted EBITDA to exceed $450 million. “The combination of Meredith's celebrated cross platform brands, creative content and first-party data with Dotdash's digital first brands is a game-changer for the industry,” said Tom Harty, chairman and CEO of Meredith, in an investor statement. “Nowhere else will you find such a premium portfolio of media assets under one roof.” Des Moines, Iowa-based Meredith acquired Time Inc. in 2018 for $2.8 billion bringing iconic titles including TIME, People and Sports Illustrated into the Meredith fold. Over the next two years, the company sold TIME, Money, Fortune and Sports Illustrated to separate entities as it focused on its lifestyle brands. "The Meredith family is extremely proud of everything the company has achieved over the past 120 years," said Mell Meredith Frazier, vice chairman of the Meredith board of directors. "Our creative and devoted employees have guided our beloved brands through a fast-changing media landscape – enriching the lives of generations of Americans. The Meredith Foundation will continue to be an active member in the flourishing Des Moines community, as will Dotdash Meredith."

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IAC's Dotdash to Acquire Meredith in $2.7 Billion Deal

The resulting company will reach 175 million monthly users

Mark Stenberg

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