Top > Business > 2006 > November > 2006-11-22

Investor Group to Purchase Reader`s Digest

Reader`s Digest Association Inc. publisher of Reader`s Digest a monthly general interest family magazine since February 1922 has agreed to be bought by an investment group. Although the magazine`s circulation has declined in recent years it is still the best-selling general magazine in the United States. According to Mediamark Research, Reader`s Digest is read by more readers with a household income of over $100,000 that Fortune, The Wall Street Journal, Business Week and Inc. combined. The magazine also has international editions reaching 80 million readers in over 70 countries and 21 languages. The company posted a $2.4 billion profit in the last fiscal year.

The company headquartered in Pleasantville, New York has agreed to be acquired by an investor group for $1.6 billion the two sides announced lately. Together with the assumed debt the deal is worth $2.4 billion. The investment group will be paying $17 per share which represents a 23 percent premium over the average share price in the past 45 trading days. The deal is expected to be finalized by the first quarter of 2007.

Heading the investment group is Ripplewood Holdings, which already has investments in media with investments in Direct Holdings Worldwide and WRC Media. The investor group also includes Capital Partners, GoldeTree Asset Management, GSO Capital Partners, Magnetar Capital, Merrill Lynch Capital Corp. and the J. Rothschild Group. Experts say buyout firms are becoming increasingly active in media and more acquisitions may take place in the near future.