Meredith Agrees to Buy Time Inc.

$2.8 billion deal partly financed by funds from Koch Industries
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Time Inc. has agreed to be acquired by Meredith Corp. in a $2.8 billion deal partially financed by Koch Industries, whose owners are known to back conservative causes.

Time Inc., publisher of Time, People and Sports Illustrated, was once part of Time Warner Inc., but was spun off when the publishing business soured. It has been trying to diversify into online media and digital video, but has not recaptured the success of its legacy publishing business. Most recently, Time Inc. earlier this month launched Sports Illustrated TV on Amazon Channels.

Meredith, which owns TV stations in addition to its magazines, said the combined companies would be a multimedia powerhouse.

Related: CBS-Meredith Deal Factors in Hulu Commitment

"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 chair 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, Lacy said. "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.”

Combined the companies would have revenue of $4.8 billion, including $2.7 billion of ad revenue, of which $700 million would be digital.

Meredith is paying $18.50 a share in the all-cash deal. The $2.8-billion price tag includes assumed debt. The transaction was approved by the boards of both companies. 

Meredith said it has secured $3.55 billion in financing from RBC Capital Markets, Credit Suisse, Barclays and Citigroup Global Markets.

It has also secured $650 million in preferred equity from Koch Equity Development. Koch will not have a seat on the board or influence on editorial or managerial operations, Meredith said.

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