Magazine publisher and broadcast company Meredith Corp. said Sunday afternoon it will acquire Time Inc. in a deal valued at $2.8 billion, a further sign of the steep challenges facing the print magazine industry.
The Des Moines, Iowa-based company said in a statement that it has agreed to pay $18.50 a share for New York-based Time Inc., the publishing company that owns the marquee magazines Time, Fortune and Sports Illustrated.
The deal — which includes $1.85 billion in cash and the assumption of debt — had been approved by both firms’ boards of directors and is expected to close in the first quarter in 2018.
The transaction received financial backing from the billionaire Koch brothers. Meredith said it secured $650 million from Koch Equity Development, the investment arm of Koch Industries, but the publisher said Koch Equity Development would not have a seat on the Meredith board and “will have no influence on Meredith’s editorial or managerial operations.”
After speculation of the deal began to bubble, media experts questioned whether the Koch brothers would use Time’s storied publications to promote their brand of conservative politics.
This would not be the first merger talks for the two companies. They have had several rounds of negotiations in recent years, but no deal emerged until now.
Meredith’s best-known brands include Family Circle and Better Homes and Gardens. In addition to Time magazine, Time Inc. also publishes Entertainment Weekly and People.
Like all traditional print publications, both Time and Meredith have struggled to replace shrinking print ad revenue.
Time Inc., which was spun off from Time Warner Inc. in 2014, has been hard hit as more readers migrate to digital platforms.
In the first nine months of the year, Time Inc.’s revenue dropped 9% to $2 billion, compared to a year earlier.
The tough climate has put pressure on other publishers. Rodale, the publisher of Runner’s World and Men’s Health, recently disclosed that it had sold to Hearst, which owns Cosmopolitan and Esquire.
Shares of Time Inc. closed at $16.90, up 2.1% on Friday. Meredith stock closed at $61, up 1.3%.
5:30 p.m.: This article was updated to include additional background on the deal.
This article was originally published at 4:55 p.m.