A U.S. investor group led by Ripplewood Holdings LLC will purchase the Reader’s Digest Association Inc. for $2.4 billion, including the assumption of debt.
The board of directors of Reader’s Digest has approved the merger agreement and recommended to the holders of the publisher’s common stock that they adopt the merger agreement.
Ripplewood, along with J. Rothschild Group, GoldenTree Asset Management, GSO Capital Partners, Merrill Lynch Capital Corp. and Magnetar Capital, will pay Reader’s Digest stockholders $17 a share in cash for each share of Reader’s Digest common stock they hold.
This represents a premium of approximately 25 percent over Reader’s Digest volume-weighted average price over the past 60 trading days.
Reader’s Digest, Pleasantville, NY, is a global publisher and direct marketer of products for people of all ages and cultures around the world. The company had revenues of $2.4 billion for the fiscal year ended June 30.
Its flagship publcation, Reader’s Digest, is sold in more than 60 countries and is the largest-selling magazine in the world.
In addition to Reader’s Digest, the company publishes more than 20 magazines and online properties, including Every Day with Rachael Ray, Allrecipes.com and Taste of Home.
Based in New York, Ripplewood is a leading private equity firm established in 1995 by Timothy C. Collins. Through five institutional private equity funds managed by Ripplewood, the firm has invested more than $3 billion in transactions in the United States, Asia, Europe and the Middle East.
Ripplewood ha s a record of investing in publishing and direct marketing . Its U.S. portfolio holdings include Asbury Automotive; WRC Media Inc., a publisher of supplementary educational materials including Weekly Reader, World Almanac and CompassLearning; and Direct Holdings Worldwide, the parent company to Lillian Vernon Corp. and Time Life Inc.
The Reader’s Digest transaction is expected to close during the first quarter of calendar year 2007. It is subject to the funding of the investor group’s committed financing and the approval of the holders of a majority of the outstanding shares of Reader’s Digest common stock, as well as other customary closing conditions, including antitrust clearance.