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Reader's Digest to Buy Allrecipes.com

Reader's Digest (RDA) agreed to acquire Allrecipes.com, a food and cooking Web site, for about $66 million.

The deal represents Reader's Digest's first major Internet acquisition. The media company said the site will act as a portal for its existing food Web sites, which support its magazine properties like Taste of Home and Light and Tasty.

Reader's Digest said the transaction will be funded by its existing debt capacity and is expected to close in its fourth quarter, which ends June 30.

The company anticipates the deal will add about $4 million in earnings before interest, tax, depreciation, tax and amortization in the first year. The effect on overall earnings is expected to be neutral or dilutive by a penny a share.

"Our acquisition of Allrecipes.com will provide us with a valuable digital platform to further leverage our position as the country's leading food and cooking publisher,"the company said. "It will enable us to bring together online communities from the various RDA properties using the common platform of an industry-leading food and cooking."

Reader's Digest shares closed Friday at $14.75, down 7 cents.

This story was created through a joint venture between TheStreet.com and IRIS.

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