The Legal Record
VOL. 119, NO. 50 ONLINE EDITION December 12, 2017
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Kansas ties in Meredith’s acquisition of Time Inc.
Magazine and broadcasting company Meredith Corp. is buying magazine publisher Time for about $1.8 billion, with help from the private equity arm of Wichita-based Koch Industries. But that’s not the only Kansas connection in the deal.  

The chairman and chief executive officer of Meredith, Steve Lacy, grew up in Johnson County and earned bachelor’s and master’s degrees in accounting from Kansas State University. He continues to serve on the board of the Kansas State University Foundation.  

His Iowa-based company owns 17 TV stations that reach 12 million U.S. households. Its women- and lifestyle-focused magazines and websites include Better Homes & Gardens, Family Circle and Allrecipes. Time Inc., based in New York, has publications including Time, Sports Illustrated, People, Fortune and Entertainment Weekly.  

Including Time’s debt, Meredith values the deal at $2.8 billion.  

To get the deal done, Meredith got $650 million in financial backing from the private equity arm of Koch Industries, Inc. Meredith CEO Steve Lacy said on a call that the company had not wanted an investor who would want to help run the business, so it went with Koch for financial aid because of their desire to be “passive” investors and because they didn’t require a board seat.  

A Koch representative did not answer questions about why the company was interested in media but said Monday said that the investing arm, Koch Equity Development, was making a “passive financial investment” that doesn’t include board or management representation.  

Combined, the media companies posted $4.8 billion in revenue last year. Meredith says together they will have 135 million readers and 60 million paid subscribers. Meredith says the deal strengthens its appeal to advertisers as the media industry consolidates, and it may buy more properties. But the company will also evaluate whether to sell any magazines after the Time acquisition closes.  

Meredith also expects to cut $400 million to $500 million in costs in the first two years of operation as a combined company, which potentially means layoffs.  

Time is trying to shift to a digital strategy, but it has struggled. It posted two straight years of annual losses and its revenue has declined since it split off from Time Warner in 2014. Analysts expect a return to profit in 2017, however. Meredith has fared better.  

Meredith will pay $18.50 per share in cash for Time’s nearly 100 million outstanding shares.  

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