Reader’s Digest To Be Sold For $1.6 Billion To Private Equity; Online Still Small But Growing Part

Updated below:
In a surprise deal, the eponymous Reader’s Digest has been sold in what is the biggest magazine deal of the year: for about $1.61 billion by an investment group led private equity firm Ripplewood Holdings. With the assumption of RD’s $776.3 million debt-load, the total price tag of the deal stands at some $2.4 billion. The Ripplewood-led investment group includes J. Rothschild Group, GoldenTree Asset Management, GSO Capital Partners, Merrill Lynch Capital Corp. and Magnetar Capital. The transaction is expected to close in the first quarter of the year. Last month, the company posted a quarterly loss of $26.7 million.
Ripplewood’s portfolio includes Direct Holdings Worldwide, a direct marketer of entertainment products under the Time Life brand; and WRC Media, which publishes supplementary educational materials for the school, library, and home markets.
There’s too much history to go into for me here, but suffice to say the brand and the magazine had been flagging of late, after competition from all kinds of sources…plus the magazine talks to a different era. Online, RD.com has been an also-ran, at best, though it had kickstarted its online strategy of late: earlier this year it bought Allrecipes.com, an online community food and cooking website for about $66 million.
More details in the release here.
Updated: The editor of Reader’s Digest, left a comment in this post, responding to my contention that RD speaks to a different era: “Yes, our readers actually have pulses and heartbeats. In fact, we have over 3 million teenagers who read the magazine, as well as soldiers, young mothers, and yes, baby boomers who are aging into retirement. We don

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