Primedia Sells American Baby to Meredith for $115MPrimedia Inc. will sell American Baby magazine and several affiliated properties to Meredith Corp. for $115 million, the companies said yesterday.
The transaction is to close before the end of the year, subject to regulatory approval and other closing conditions. Meredith, Des Moines, IA, publishes magazines such as Better Homes & Gardens and Ladies Home Journal. The American Baby group will help it reach younger women and the Hispanic markets, said Steve Lacy, president of Meredith Publishing Group. The company also is testing a new title, Living Room, to appeal to the same younger audience.
American Baby, a monthly magazine with 2 million subscribers, debuted in 1938. The other magazines in the deal are Childbirth, First Year of Life, Espera, Primeros 12 Meses and Healthy Kids en Espanol. The deal includes television programs "American Baby" and "Healthy Kids," which reach 60 million households on the FX network, and Baby Faire expos and product shows. Also included are custom publications for clients such as Procter & Gamble, Fisher Price and Mead Johnson and sampling programs that reach 10 million expectant and new parents yearly.
Primedia spokesman Whit Clay said the company has no plans to sell other magazines. Primedia, New York, which has been shedding several non-core assets to reduce its debt, said the transaction would boost the dollar value of assets sold to $345 million. This beats the $250 million target promised after the company's acquisition of Emap PLC's U.S. magazine division in July 2001.
Other sold properties include Modern Bride magazine, Chicago magazine and Bacon's media information service. Primedia CEO/chairman Tom Rogers said American Baby had less strategic value to his company since its sale of Modern Bride earlier this year.
The company's share price has stayed in the $1-$2 range since summer, though its third-quarter earnings were above what Wall Street expected, the company said Nov. 1. A Merrill Lynch analyst upgraded Primedia's stock from "sell" to "neutral." Its stock closed at $2.31 yesterday.
After the asset sales and other moves to reduce debt, Primedia said, it will have outstanding debt of $1.75 billion, compared with $2 billion a year ago.