Time Inc, the publisher of Time Magazine, is selling for $2.8 billion to media conglomerate Meredith Corporation, backed by the billionaire Koch brothers known for supporting conservative causes, in an unlikely ending to a saga over the future of CNN's parent company.
Once the two companies are merged, Meredith says they will serve almost 200 million consumers, with its digital media business reaching 170 million monthly unique visitors in the U.S. Meredith and Time Inc. made combined revenues of $4.8 billion in 2016, including $2.7 billion in total advertising revenue (with $700 million of that from digital advertising) and adjusted EBITDA of $800 million. And its revenue has dropped consistently over the previous year and a half.
The all-cash transaction includes about $1.7 billion for the company assets plus more than $1 billion in debt.
$650 million of the equity raised stems from Conservative billionaires the Koch brothers (Koch Equity Development), something that has already lead Meredith to play down their involvement.
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"We are creating a premier media company serving almost 200 million American consumers across industry-leading digital, television, print, video, mobile, and social platforms positioned for growth", Meredith chairman and CEO Stephen M. Lacy said in a statement.
"We think there's tremendous untapped potential", Time CEO Rich Battista told The New York Times about why the company was turning away potential suitors.
The move to merge the companies has pushed the publisher up the ranks, enabling it to now take a place in the top ten digital media companies globally.
Time chairman John Fahey said the sale was in the best interests of the company and its shareholders, noting the price represented a 46% premium to the closing price of shares on 15 November, the day prior to media reports about the deal. It has traded between $9.90 and $20.40 a share over the past 52 weeks.
President Trump tweeted last week he wasn't interested in being named Time magazine's Person of the Year for the second straight year.