Meredith Corporation (MDP) said Sunday evening that it will acquire Time Inc. (TIME) for $18.50 a share in an all cash transaction valued at $2.8 billion. The deal, which is expected to close in the first quarter, represents a 46% premium over the closing price of Time Inc. on Nov 15 which is when media reports surfaced of Meredith's interest.
If joined in 2016, Meredith estimates the combined company would have had sales of $4.8 billion and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $700 million. Meredith believes it could ring out $400 million to $500 million in synergies within the first two years of operations likely through staff consolidation.
In addition to securing $3.55 billion in new financing from a consortium of RBC Capital Markets, Credit Suisse, Barclays and Citigroup, Meredith has scored a $650 million preferred equity commitment from Koch Equity Development (KED). KED is an investment fund backed by conservative-leaning billionaires Charles and David Koch.