Better Capital gives Reader's Digest UK a new life
10 Apr 2010
Reader's Digest's UK arm was given a new lease of life yesterday after it was bought out of administration by private equity firm Better Capital, a company backed by British venture capitalist Jon Moulton, for £13 million.
Reader's Digest Association (RDA), publisher of the Reader's Digest magazine, had put its 72-year-old UK edition, (RDA UK), under administration in February 2010 after the UK Pensions Regulator refused to approve a massive deficit in its UK pension fund. (See: Reader's Digest UK arm under administration)
RDA UK employed 135 people and had 1,600 members on its pension fund, and had accumulated a pension deficit of £125 million.
Moore Stephens, an accounting firm association, handling the administration of Readers Digest UK, had received nearly 100 offers initially, which were later narrowed down to less than 10 last month.
AIM-listed Better Capital bought Reader's Digest UK in a debt free £13-million management buy-out deal. It will take on 100 of the existing employees and said that it would invest further to bring the magazine back to it's heydays.
RDA UK's managing director Chris Spratling, managers and other employees will take a 35-per cent stake in the company and Spratling will continue to run the business.
