Meredith Corporation announced that it has entered into a binding agreement to acquire all outstanding shares of Time Inc. for US$18.50 per share in an all-cash transaction valued at $2.8 billion. The transaction has been unanimously approved by the boards of directors of Meredith and Time Inc., and is expected to close during the first quarter of calendar 2018.
"We are creating a premier media company serving nearly 200 million American consumers across industry-leading digital, television, print, video, mobile, and social platforms positioned for growth," said Meredith Corporation chairman and CEO Stephen M. Lacy. "We are adding the rich content-creation capabilities of some of the media industry's strongest national brands to a powerful local television business that is generating record earnings, offering advertisers and marketers unparalleled reach to American adults. We are also creating a powerful digital media business with 170 million monthly unique visitors in the U.S. and over 10 billion annual video views, enhancing Meredith's leadership position in reaching millennials."
The transaction will create a diversified media and marketing company with calendar 2016 combined revenues of $4.8 billion – including $2.7 billion of total advertising revenues with nearly $700 million of digital advertising revenues – and adjusted EBITDA of $800 million. Additionally, Meredith anticipates generating cost synergies of $400 million to $500 million in the first full two years of operation.
"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 president and chief operating officer 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. We look forward to completing the transaction; welcoming the Time Inc. employees to Meredith; delivering on our pledge to achieve identified synergies; and growing shareholder value."
Key strategic and financial benefits of the transaction:
"To summarise, we believe this acquisition represents a transformative and financially compelling growth opportunity for Meredith Corporation and will increase shareholder value over time," Lacy said. "We are acquiring an impressive portfolio of leading brands and a digital business of scale with tremendous growth potential, complemented by our growing television broadcasting business that produces strong cash flow, fueled by growing political advertising and retransmission revenues. And the company will be led by Meredith's executive management team with expertise in integrating acquisitions and operating multiplatform media businesses."
The transaction is expected to close during the first quarter of calendar 2018.
Meredith and Time Inc. are members of FIPP.
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