DES MOINES, Iowa (AP) — Magazine publisher and multimedia company Meredith Corp. said Monday it will sell its Local Media Group consisting of 17 television stations to Gray Television Inc. for $2.7 billion in cash and will focus on expanding its print and digital magazines business.
The Des Moines, Iowa-based company publishes more than 20 magazines including People and Better Homes & Gardens in both print and digital versions.
The company’s magazine and digital division will become a stand-alone publicly traded company retaining the Meredith Corp. name and New York Stock Exchange trading ticker symbol MDP.
The company will remain headquartered in Iowa and will organize under digital and magazine segments for financial reporting purposes. The senior executive team will remain in place, Chairman and Chief Executive Officer Tom Harty said.
“This transaction will allow us to sharpen our focus on the potential of our brands and assets,” Harty said.
The company will use proceeds from the sale to extinguish corporate debt, pay transaction-related expenses and pay $14.50 a share to Meredith stockholders who will maintain a 1-for-1 equity share in the company after the sale.
Federal regulatory approval is required including clearance by the Federal Communications Commission. Harty said the deal is expected to close in the fourth quarter.
Meredith has television stations in several U.S. cities including Atlanta, Las Vegas and Phoenix.
The company’s magazines focus on increasingly popular celebrity and entertainment news, house and home, food, style, health, fitness, and parenting topics which have experienced accelerated interest during the coronavirus pandemic, and the company said fundamental shifts in consumer behavior suggest these trends will continue.
Their online digital business is growing and its advertising provides more than half of the company’s expected advertising revenue. Digital advertising revenue in Meredith’s fiscal 2021 third quarter was up 21% and has surpassed magazine advertising revenue for two consecutive quarters, the company said.
A Meredith spokeswoman said the company employs more than 5,200 workers, including about 850 in in corporate headquarters in Des Moines. About 1,600 will be employed by Gray after the deal closes.
“No staffing changes are anticipated at this time,” spokeswoman Kara Kelly said.
Meredith bought Time Inc. in November 2017 in a deal valued at $2.8 billion including Time’s debt. The company has since sold several of the acquired magazine titles including Time, Fortune, Sports Illustrated and Money.