Business

Barry Diller’s Dotdash Agrees to Buy Meredith, a Magazine Giant

A digital-age magazine giant was born on Wednesday with the announcement that Dotdash, a publishing unit of Barry Diller’s InterActiveCorp, had reached an agreement to acquire Meredith Corporation’s stable of publications, which includes People, Better Homes & Gardens, InStyle, Entertainment Weekly and roughly 40 other titles and digital brands.

The purchase price is roughly $2.7 billion, or $42.18 per share, the companies said in a joint announcement. If the deal goes through, the new company will be called Dotdash Meredith, and it will be led by the Dotdash chief executive, Neil Vogel, the companies said. And it would be a top-10 publisher in terms of audience size, according to the internet metrics service Comscore, the companies added.

“We admire the consumer’s trust in Meredith’s more than 40 brands when it comes to essential life decisions, and we believe true and reliable content created by talented writers, editors and photographers, backed by real brands, has a very bright future across all platforms,” Joey Levin, IAC’s chief executive, said in a statement.

“Combined with Dotdash’s ability to deliver readers fresh, unbiased content on any topic,” he continued, “together we can offer uniquely engaged audiences to advertisers and partners — based not on a reliance on private information or personal history, but on relevancy to the content they’re consuming and a deep understanding of their needs.”

In an investor call on Wednesday, Mr. Vogel said he was not planning on “cost synergy” — that is, layoffs or other cuts as a result of the merger. “Our playbook is going to drive audience, performance, and help the brands maintain their stance in the digital world that they have in the print world,” Mr. Vogel said.

Tom Harty, the chief executive of Meredith, said in a statement, “We are thrilled to join forces to accelerate Meredith’s digital future.”

The merger of the two companies would come as a hit to Des Moines, Iowa, where Meredith is a major employer: Dotdash Meredith will be based in New York, at Dotdash’s headquarters in the Chelsea neighborhood of Manhattan, an IAC spokeswoman said. The new company would “keep a presence” in Des Moines, the spokeswoman added.

Meredith was founded in 1902 by Edwin T. Meredith, later the agriculture secretary under President Woodrow Wilson, with a magazine called Successful Farming. It became a media behemoth in 2018, when it bought the storied American magazine company Time Inc. for $2.8 billion.

IAC is the company behind Tinder, Match and OKCupid. Its publishing unit, Dotdash, operates 14 lifestyle journalism sites, including Serious Eats and Investopedia. Dotdash got its start in the early 1990s as the website About.com and became part of IAC in 2012, when Mr. Diller bought it for $300 million from The New York Times Company.

Dotdash showed signs of change in 2019, when it bought a venerable magazine, Brides, from Condé Nast, the publisher of Vogue, Vanity Fair and The New Yorker. It soon scrapped the 85-year-old print version to concentrate on the Brides website.

Before the acquisition, Mr. Vogel said his idea for Dotdash was that it would become “what the future of Condé Nast should be.” The acquisition of Meredith puts the company closer to realizing that ambition.

Magazines have been crunched in recent years by readers’ preference for digital over print, where advertising is both less lucrative and dominated by tech companies.

Charles Whitaker, the dean of the Medill School of Journalism at Northwestern University, said that in purchasing Time Inc., Meredith had been “wildly optimistic about the extent to which acquiring those brands would create these economies of scale and synergies that would help them fend off the Googles and Facebooks of the world.”

He added, “This continued consolidation is obviously troubling. The more competition and the more companies that we have producing content, providing jobs and appealing to audiences is better for the industry.”

Meredith slimmed itself down considerably in the years since its purchase of Time Inc., shedding three prominent Time Inc. titles that did not fit the company’s emphasis on style, fashion, celebrity news and homemaking.

Time magazine, the flagship, went to Marc Benioff, the chief executive of Salesforce, and his wife, Lynne, for $190 million later in 2018. The company also sold Fortune, for $150 million, to Chatchaval Jiaravanon, a scion of a prominent Thai family, and Sports Illustrated, for $110 million, to Authentic Brands Group. (A.B.G. later sold Sports Illustrated to TheMaven, which last month renamed itself the Arena Group.)

Meredith also sold another asset it had picked up in the Time Inc. deal — Time Inc. U.K., the publisher of Woman’s Weekly and Wallpaper magazines — to the London private equity firm Epiris for a reported $167 million. In June, Meredith announced the sale of its local media properties, which included 17 television stations in Atlanta, Phoenix and other markets, to Gray Television in a $2.8 billion deal.

While Meredith was shrinking, Dotdash was bulking up. In the last two and a half years, the company made eight acquisitions, including Byrdie, Liquor.com, Treehugger and Simply Recipes.

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