Meredith Acquiring Time in Deal Backed by Koch Brothers

Meredith Corp, the U.S.-based media company announced Sunday it would acquire Time Inc., which publishes Sports Illustrated, Fortune and People magazines, for an all-cash deal of $1.84 billion backed by David and Charles Koch the billionaire brothers.

This is a huge coup for Meredith, which in 2013 and earlier in 2017 held talks that ended without success to buy Time.

This will give business, sports and news brands to the broadcaster and publisher based in Des Moines, Iowa. Meredith currently owns magazines like Family Circle and Better Home & Gardens amongst others.

Analysts said that increasing their publishing assets would give Meredith scale required to spin its broadcasting arm off into another standalone business.

When Meredith is combined with Time brands the new entity will have an overall readership of more than 135 million people as well as paid circulation of more than 60 million. This deal will also expand the reach of Meredith with millennials who are very internet-savvy, creating a digital media giant with 170 million visitors in the U.S. and over 10 billion video views annually.

The Kochs are two of the richest men in the world through ownership they have of Koch Industries, an industrial empire which makes such products as Dixie Cups, Brawny paper towels and Lycra.

Private equity company Koch Equity Development owned by the brothers, offered Meredith preferred equity of $650 million to fund the acquisition of Time.

The two companies said the Koch equity arm would not have a seat on the board of Meredith and would not have influence on managerial or editorial operations at Meredith.

The Kochs, who advocate conservative policies and influence in some parts of the Republican Party, previously has expressed an interest in acquiring media properties like the Chicago Tribune and Los Angeles Times.

The involvement of the Kochs in the deal for Time underscores a belief in the strength of Meredith in operating a media business, its strategies, and ability to unlock substantial value from the acquisition of Time, according to the statement by the companies announced the acquisition.

The deal is expected to be completed during the first quarter of 2018.

The deal, including debt, gives Time a value of $2.8 billion. Meredith said that it anticipated achieving cost savings through eliminating any overlap between the companies that it believes will reach between $400 million and $500 million the first full two years of the operation following the closing. Meredith said it was also launching a tender to acquire shares of Time at $18.50 a piece in cash.

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