Diversified media company Meredith (NYSE: MDP) recently agreed to buy Time (NYSE: TIME), which publishes iconic magazines like Time, Fortune, Sports Illustrated, and Entertainment Weekly. Meredith will buy Time for $18.50 per share in cash (a 46% premium to Time's closing price on Nov. 15) and assume all of its debt -- which values the entire deal at approximately $2.8 billion.

The key facts

The acquisition, which was approved by the boards of both companies, is expected to close during the first quarter of 2018. The deal was partly supported by an infusion of $650 million in Meredith from the private equity arm of billionaire brothers Charles G. and David H. Koch.

John Fahey, chairman of the board at Time, stated that the sale was "in the best interest of the company and its shareholders", and thanked Time CEO Rich Battista for "his strong and exemplary leadership." Battista stated that he was proud of Time's ability to "launch, grow, and advance our multi-platform offerings during unprecedented times in the media sector."

Battista also noted that Time now reaches over 230 million consumers across its digital and print platforms every month, and that its brands would "continue to be powerful voices in media for many years to come."

Time hasn't posted a quarter of year-over-year sales growth since the first quarter of 2016. Analysts had expected Time's revenue and earnings to fall 10% and 8% respectively this year. Meredith was expected to post a 1% sales decline and a 16% earnings drop this year.

The key takeaway

Meredith's takeover of Time isn't surprising, since the print media industry has undergone a rapid consolidation over the past few years. However, critics have warned that the Koch brothers' history of using investments to promote their conservative viewpoints could impact the future of Time's magazines -- just as Rupert Murdoch's takeover of Fox (NASDAQ: FOX) (NASDAQ: FOXA) via News Corp. (NASDAQ: NWS) dramatically altered the character of Fox News.

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The author(s) may have a position in any stocks mentioned.

 

Leo Sun has no position in any of the stocks mentioned.

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