AntZ
07-19-2011, 06:11 PM
Reader’s Digest puts itself up for $1bn sale
By David Gelles in New York
July 18, 2011 5:34 pm
Reader’s Digest Association, the 90-year-old publishing and marketing company that emerged from bankruptcy last year, is looking to sell itself for at least $1bn, according to people with knowledge of the plans.
The company publishes more than 90 magazines, including the eponymous title with which it made its name in the postwar US, and Every Day with Rachael Ray. It also runs a successful direct marketing operation. Reader’s Digest UK is owned and operated independently.
Potential buyers include private equity groups and other magazine groups, but no bidders have yet come forward. The company recently hired advisers to explore the sale, and could sell itself in parts.
Reader’s Digest Association declined to comment.
In April, the company appointed a new board and replaced chief executive Mary Berner, who had been trying for four years to reinvent the ageing brand for the 21st century. Her successor was Tom Williams, previously chief financial officer.
During the board reshuffle in April a new board member, Randall Curran, previously the chief executive of a telecommunications company, became chairman.
Reader’s Digest Association was taken private for $2.8bn in 2007 by a consortium led by Ripplewood, a private equity firm. Ripplewood loaded the company with debt and ended up losing its entire $600m initial investment, leaving the company to file for bankruptcy in 2009.
Over two years, the company worked with Kirkland & Ellis, a law firm, and its senior lenders to reduce debt from $2.4bn to $550m.
During the process, it placed Reader’s Digest UK in administration, because of complications with its pension fund. The UK subsidiary was bought from administration for £13m ($21m) last year by Better Capital, the private equity group run by Jon Moulton.
Since emerging from bankruptcy, Reader’s Digest Association has not been able to right itself. In the last 10 months of 2010, the company lost $30m on $1.45bn in revenues.
Yet, the company still has some desirable assets. Its customer database of more than 225m people worldwide gives it broad reach for advertisers, and some of its magazine titles remain popular. Particular strengths are its food and entertainment properties, which include Allrecipies.com and a suite of successful iPhone applications.
However, more obscure assets, such as magazines including Birds & Blooms, Country Woman and The Family Handyman, could prove harder to offload.
_______________________________________________
I grew up always seeing these little magazines in the house, my dad loved Readers Digest and read it from the time he was a kid till his death.
By David Gelles in New York
July 18, 2011 5:34 pm
Reader’s Digest Association, the 90-year-old publishing and marketing company that emerged from bankruptcy last year, is looking to sell itself for at least $1bn, according to people with knowledge of the plans.
The company publishes more than 90 magazines, including the eponymous title with which it made its name in the postwar US, and Every Day with Rachael Ray. It also runs a successful direct marketing operation. Reader’s Digest UK is owned and operated independently.
Potential buyers include private equity groups and other magazine groups, but no bidders have yet come forward. The company recently hired advisers to explore the sale, and could sell itself in parts.
Reader’s Digest Association declined to comment.
In April, the company appointed a new board and replaced chief executive Mary Berner, who had been trying for four years to reinvent the ageing brand for the 21st century. Her successor was Tom Williams, previously chief financial officer.
During the board reshuffle in April a new board member, Randall Curran, previously the chief executive of a telecommunications company, became chairman.
Reader’s Digest Association was taken private for $2.8bn in 2007 by a consortium led by Ripplewood, a private equity firm. Ripplewood loaded the company with debt and ended up losing its entire $600m initial investment, leaving the company to file for bankruptcy in 2009.
Over two years, the company worked with Kirkland & Ellis, a law firm, and its senior lenders to reduce debt from $2.4bn to $550m.
During the process, it placed Reader’s Digest UK in administration, because of complications with its pension fund. The UK subsidiary was bought from administration for £13m ($21m) last year by Better Capital, the private equity group run by Jon Moulton.
Since emerging from bankruptcy, Reader’s Digest Association has not been able to right itself. In the last 10 months of 2010, the company lost $30m on $1.45bn in revenues.
Yet, the company still has some desirable assets. Its customer database of more than 225m people worldwide gives it broad reach for advertisers, and some of its magazine titles remain popular. Particular strengths are its food and entertainment properties, which include Allrecipies.com and a suite of successful iPhone applications.
However, more obscure assets, such as magazines including Birds & Blooms, Country Woman and The Family Handyman, could prove harder to offload.
_______________________________________________
I grew up always seeing these little magazines in the house, my dad loved Readers Digest and read it from the time he was a kid till his death.