Investor group to acquire Reader''s Digest for $1.6 billion
16 Nov 2006
Mumbai:
An investor group led by buyout firm Ripplewood Holdings
has agreed to buy Reader's Digest Association Inc, publisher
of one of the most widely-read US magazines, for $1.6
billion, the two sides said in a statement. Including
assumed debt, the deal is worth $2.4 billion.
The deal values Reader's Digest at $17 per share. Ripplewood
said the price represents a 23 per cent premium over the
average closing price of Reader's Digest shares in the
previous 45 trading days.
Ripplewood already has investments in Direct Holdings
Worldwide, a direct marketer of entertainment products,
and WRC Media, which publishes educational materials.
The current deal would add to Ripplewood's investments
in media.
The investor group includes J. Rothschild Group, GoldenTree
Asset Management, GSO Capital Partners, Merrill Lynch
Capital Corporation and Magnetar Capital.
Reader's Digest is best known for its flagship publication,
Reader's Digest. The magazine, which is published in 21
languages, has a monthly circulation of about 18 million,
and is read by an estimated 80 million people worldwide.
The company posted revenue of $2.4 billion in the fiscal
year ended June 30.
The private equity group, which will also assume Reader's
Digest's debt, said in its filing with regulators that
for the quarter ended September 30, the company had long-term
debt totalling $776.3 million.
The company said it expects the sale to close in the first
quarter of
2007, subject to shareholder approval and other customary
conditions. Reader's Digest was advised by Goldman Sachs
and Michael R. Lynch. The deal is expected to close in
the first quarter of 2007.
