Reader's Digest to Buy Reiman Publications for $760 Million

Share this content:
The Reader's Digest Association Inc. announced yesterday that it will buy most of the assets of Reiman Publications for $760 million in cash as the company continues to lessen its reliance on sweepstakes promotions.

Reiman Publications LLC, Greendale, WI, is a publisher of 12 cooking, gardening, country living and nostalgia magazines, and has a mail-order business and book club. The largest title, Taste of Home, is the country's top-selling food magazine. The company has a proprietary database of more than 32 million individuals. Reiman is principally owned by investment firm Madison Dearborn Partners Inc., Chicago, and senior management of Reiman.

Reader's Digest, Pleasantville, NY, said it intends to enhance Reiman's marketing efforts through cross-promotions, list selection capabilities and supply-chain management. Though Reiman's magazines do not carry advertising, they may create special advertising vehicles outside of the magazines, the company said. Officials expect Reiman to contribute revenues in excess of $300 million and significantly reduce the contribution of sweepstakes promotions to the company's total revenues.

"[Reiman's] customers have at least three characteristics that we look for," Reader's Digest chairman/CEO Thomas O. Ryder said in a statement. "They are direct mail buyers, they buy through non-sweepstakes promotions and they share similar demographics and values with Reader's Digest customers -- which increases the likelihood of success in cross-promotions."

Fifty-nine percent of Reiman's database, or 19 million customers, are not Reader's Digest customers, officials said. Reiman's magazine titles include Birds & Blooms with 1.5 million subscribers; Country Discoveries with 335,500 subscribers; Country with 969,200 subscribers; Country Woman with 1 million subscribers; Crafting Traditions with 222,600 subscribers; Farm & Ranch Living with 324,300 subscribers; Light & Tasty with 959,900 subscribers; Quick Cooking with 2.6 million subscribers; Reminisce with 929,800 subscribers; and Taste of Home with 3.3 million subscribers.

In addition, Reiman's Country Store catalog has 472,800 last 12-month mail-order buyers, selling country-themed items such as quilts, dinnerware, candles, seasonal merchandise, bird feeders and garden tools.

The Wall Street Journal reported last week that Highfields Capital Management tried to gain control of Reader's Digest from Wallace Reader's Digest Funds because it opposed the acquisition. However, Wallace Reader's Digest Funds, which controls 50 percent of Reader's Digest Association Inc.'s voting shares, rejected the proposal.

Problems with sweepstakes marketing and the ad recession have taken their toll on Reader's Digest, as the company has closed two magazines, Walking and New Choices, in the past six months. Its stock has dropped 37 percent over the past five years. Reader's Digest circulation stands at 12.5 million.

The transaction is being paid for through financing from J.P. Morgan and Goldman Sachs. It has been structured as an asset purchase. Officials expect the acquisition to close before June 30.

Sign up to our newsletters

Company of the Week

Since 1985, Melissa has helped thousands of companies clean, correct and complete contact data to better target and communicate with their customers. We offer a full spectrum of data quality solutions, including global address, phone, email, and name validation, identify verification - available for batch or real-time processes, in the Cloud or on-premise. Our service bureau provides dedupe, email/phone append and geographic/demographic append services for better targeting and insight. For direct mailers, Melissa offers easy-to-use address management/postal software, list hygiene services and 100s of specialty mailing lists - all with competitive pricing and excellent customer service.

Find out more here »

Career Center

Check out hundreds of exciting professional opportunities available on DMN's Career Center.  
Explore careers in digital marketing, sales, eCommerce, marketing communications, IT, data strategies, and much more. And don't forget to update your resume so employers can contact you privately about job opportunities.

>>Click Here

Relive the 2017 Marketing Hall of Femme

Click the image above