RICHMOND, Virginia — Des Moines-based Meredith Corporation, the publisher of Better Homes and Gardens, is being bought by Media General in a deal worth $2.4 billion.
According to a press release from Meredith and Media General, the sale creates the third largest owner of major network affiliates. Initially the new company, named Meredith Media General, will own 88 stations in 54 markets, but because of regulatory considerations will need to swap or sell stations in six markets.
The transaction enterprise value, based on a $772 million net debt balance for Meredith, is around $3.1 billion.
Currently Meredith is valued at approximately $2.4 billion. The Meredith stock is valued at $51.53 per share, which is a 12-percent premium of the stock’s closing price on September 4th.
The new company plans to cut $80 million in costs within the first two years with $60 million of that coming in the first 12 months.
The sale has already been approved by the board of directors for both Media General and Meredith but must still be approved by shareholders and the Federal Communications Commission.
Current Meredith CEO Steve Lacy will be the CEO and President of Meredith Media General. He says, “We are excited about the opportunity to create a powerful new multiplatform and diversified media company with significant operations on the local and national levels.”
Though the new company will be incorporated in Virginia, the corporate offices in Des Moines and Richmond will be kept.