General M&A
October 7, 2021
6 minutes read

Deal: IAC Buys Meredith’s Magazine Business For $2.7B

IAC, a tech and media conglomerate run by mogul Barry Diller, is buying the magazine publishing operations of Meredith Corp, a…

IAC, a tech and media conglomerate run by mogul Barry Diller, is buying the magazine publishing operations of Meredith Corp, a publicly traded media conglomerate. Meredith has a roster of popular American magazines that include People and Better Homes & Gardens.

IAC will pay $2.7bn to buy Meredith’s magazine business and merge it with its own Dotdash digital publishing business. Together, they’ll form a digital-cum-print publishing giant with over $1bn in annual sales.

The combined company will be named Dotdash Meredith.

Though $2.7bn sounds big at face value, IAC is buying Meredith’s magazine operations on the cheap, not surprising given the general decline of print media in this era. For contextual purposes, Meredith had $3.2bn to spend to buy Time Inc, a major magazine publisher, just three years ago, but it’s now offloading its entire magazine operations for less than that amount.

For IAC’s Dotdash, combining with a magazine publisher is a very strategic move, even though print media isn’t in vogue right now. Buying a roster of popular magazines does well to raise Dotdash’s reputation in the media sphere while it synchronizes them with its online publishing operations to pursue growth.

Dotdash is a testament to IAC’s earned reputation of building smaller companies into giants under its ownership. Dotdash was formerly known as About.com, a fairly popular search engine that was the foundation of the current Dotdash business.

IAC bought About.com for $300mn in 2012, then oversaw its expansion by launching new online verticals and bringing some IAC-owned sites (e.g., Investopedia) under its ownership. About.com was renamed Dotdash in 2017 and has gradually become a crown jewel of IAC.

If past actions indicate anything, IAC would grow Dotdash to a satisfactory point and spin it off as a separate public company. The conglomerate is known for incubating and spinning off successful public companies, including Expedia, Vimeo, and dating apps giant Match Group.

According to IAC’s investor presentation, the Meredith deal will be financed with cash on hand and up to $1.6bn of debt that it’ll raise. The acquisition will be completed by December if all goes as planned.