NEW YORK and DES MOINES, Iowa, Oct.
6, 2021 /PRNewswire/ -- IAC (NASDAQ: IAC) and Meredith
Corporation (NYSE: MDP), a leading media company and owner of
world-class brands such as PEOPLE, Better Homes & Gardens,
Allrecipes, Southern Living, InStyle and REAL SIMPLE, today
announced their entry into an agreement pursuant to which IAC's
Dotdash digital publishing unit will acquire the entity that will
hold Meredith Corporation's National Media Group, which is
comprised of its Digital and Magazine businesses, and its
corporate operations ("Meredith"),
in an all cash transaction at a purchase price of $42.18 per share. The transaction combines the
power of Dotdash's digital publishing model with Meredith's trusted, iconic brand portfolio,
loyal audience and scale. The combined company, to be called
Dotdash Meredith and led by Dotdash CEO Neil Vogel, is expected to be one of the largest
publishers in America with leading brands across the highest value
commercial categories online, including home, health, food,
finance, parenting, and beauty. The transaction is expected to
close by the end of the year.
"The Meredith family is
extremely proud of everything the company has achieved over the
past 120 years, which is a direct reflection of our dedicated
employees," said Mell Meredith Frazier, Vice Chairman of the
Meredith board of directors. "Our
creative and devoted employees have guided our beloved brands
through a fast-changing media landscape – enriching the lives of
generations of Americans. The Meredith Foundation will continue to
be an active member in the flourishing Des Moines community, as will Dotdash
Meredith."
Digital publisher Dotdash on its own currently reaches
approximately 100 million online consumers monthly and its
collection of 14 media brands in health, finance and lifestyle are
among the fastest growing media brands online. Powered by a focus
on superior content, strong, authoritative editorial voices and
respectful advertising, Dotdash has seen 17 consecutive quarters of
double-digit revenue growth.
"We've often found opportunities in the digital transformations
of businesses and industries: travel, ticketing, dating, home
services, and now publishing. Meredith is already seeing record digital
growth and we think Dotdash can help accelerate that growth," said
Joey Levin, CEO of IAC.
Continued Mr. Levin, "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. Combined with Dotdash's ability to deliver
readers fresh, unbiased content on any topic, 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. No one will do this better than Dotdash
Meredith."
"Our digital business is growing rapidly, having surpassed our
magazine sales for the first time in the company's history," said
Tom Harty, Chairman and CEO of
Meredith. "The combination of
Meredith's celebrated cross
platform brands, creative content and first-party data with
Dotdash's digital first brands is a game-changer for the industry.
Nowhere else will you find such a premium portfolio of media assets
under one roof. We are thrilled to join forces to accelerate
Meredith's digital future."
Benefits of the transaction include:
- Premium Content: The combined company represents decades
of leadership in the creation of premium, award-winning content,
trusted by tens of millions. Dotdash has grown its content
investment year-over-year during the last four years, with a
commitment to quality user experiences, site speed, clean usable
design and limited ads.
- Iconic Brands: The combined portfolio includes
beloved brands such as PEOPLE, Better Homes & Gardens,
Allrecipes, Southern Living, InStyle and REAL SIMPLE along with
digital-first brands like Verywell, The Spruce, Byrdie and
Investopedia, collectively able to reach and engage consumers at
every stage of life's journey.
- Scale: The transaction is expected to make Dotdash
Meredith one of the largest publishers in America with enough scale
on a pro forma basis to enter into comScore's top 10, reaching 175
million online consumers monthly, including 95 percent of US
women.
- Digital Acceleration: Meredith's digital ad revenue
has already surpassed its print ad revenue for the last three
quarters. The combined company expects more than 70% of 2021 pro
forma Adjusted EBITDA to come from digital; Dotdash's proven
playbook is anticipated to further accelerate Meredith's digital growth.
- Diversified Business: The transaction combines
Meredith's best-in-class
advertising capabilities, first party data and deep advertiser
relationships with Dotdash's e-commerce and performance marketing
expertise. In the last 12 months, the combined company generated
advertising revenue of more than $1
billion and its e-commerce capabilities drove more than
$1 billion in combined e-commerce
sales to retail partners.
- High-growth, High-margin: Dotdash's proven model
and content investment strategy have driven expanding Adjusted
EBITDA margins year-over-year, which is expected to extend to
Meredith's already growing
portfolio. On a pro forma basis, the combined company expects
Adjusted EBITDA from digital assets to exceed $450 million in 2023.
"Dotdash is a digital company, and we have a very different
prism on how we view publishing. Our success is based on creating
the best content and online experiences for each and every topic we
cover, without compromise," said Neil
Vogel, CEO of Dotdash. "When we look at Meredith, we see a business that is driven by
digital. We see a collection of iconic and venerated brands rich
with heritage, leaders in their categories, and similar focus on
editorial excellence. We see unprecedented reach to women and a
print business that provides longstanding value to readers and
advertisers which we view as a strong platform to reach and engage
consumers. The opportunities are limitless. Meredith can step into its digital future and
together we can define our next chapter as Dotdash Meredith."
Investor Call
An investor presentation on the transaction is available to view
on the IR section of the IAC website. A video conference with IAC
CEO Joey Levin, Dotdash CEO
Neil Vogel and Dotdash CFO
Tim Quinn to go over the
presentation and answer questions is scheduled for Wednesday October 6, 2021 at 5:15 p.m. EDT.
The live stream and replay of the video will be open to the
public at
https://interactivecorp.zoom.us/webinar/register/WN_ZW7EgzgUTEejzXyUBoY0cQ
Advisors
J.P. Morgan Securities LLC acted as financial advisor to IAC and
Wachtell, Lipton, Rosen & Katz acted as legal counsel.
Moelis & Company LLC acted as financial advisor to
Meredith and Cooley LLP acted as
legal counsel.
Transaction Details
The transaction is structured as an all-cash stock acquisition
of the entity that will hold Meredith Corporation's Digital and
Magazine businesses and corporate operations following its spin-off
to Meredith Corporation shareholders in accordance with the
previously announced sale of Meredith Corporation's Local Media
Group business to Gray Television (NYSE: GTN), which provides for a
payment of $16.99 per share to
Meredith shareholders. The IAC
acquisition of remaining Meredith Corporation provides for a
purchase price of $42.18 per share in
cash, subject to adjustment in certain scenarios described in the
acquisition agreement.
The transaction is expected to be funded by IAC with a
combination of cash on hand and newly incurred debt and is subject
to customary closing conditions, including regulatory approvals and
completion of the spin-off. The transaction has been unanimously
approved by the Boards of Directors of both IAC and Meredith
Corporation and is not conditioned on an IAC or Meredith
Corporation shareholder vote.
About IAC
IAC (NASDAQ: IAC) builds companies. We
are guided by curiosity, a questioning of the status quo, and a
desire to invent or acquire new products and brands. From the
single seed that started as IAC over two decades ago have emerged
11 public companies and generations of exceptional leaders. We will
always evolve, but our basic principles of financially disciplined
opportunism will never change. IAC today has majority ownership of
Angi Inc., which also includes HomeAdvisor Powered by Angi and
Handy, and operates Dotdash and Care.com, among many others. The
Company is headquartered in New York City and has
business operations and satellite offices worldwide.
About Dotdash
Dotdash's vibrant brands help
approximately 100 million users each month find answers, solve
problems, and get inspired. Dotdash is among the largest and
fastest growing publishers online and has won over 80 awards in the
last year alone. Dotdash brands
include Verywell, Investopedia, The
Spruce, Byrdie, and Simply Recipes among others.
Dotdash is an operating business
of IAC (NASDAQ: IAC).
About Meredith
Meredith Corporation (NYSE:
MDP) is a multi-platform media and marketing company that
provides information and inspiration to women's lives daily through
our trusted brands including PEOPLE, Better Homes & Gardens,
Allrecipes, Southern Living, and REAL SIMPLE. We create
content and experiences focused on entertainment news, house and
home, food, style, health, fitness, travel and luxury, and
parenting – priority topics for our largely female audience.
With our long history of demonstrated integrity, editorial
excellence, and deep consumer insights we have earned relationships
with 190 million Americans across media platforms, including
digital, magazines, performance marketing, and brand licensing. Our
rich proprietary data and sophisticated technology platform provide
unparalleled insights and best in class advertising and performance
marketing solutions. Meredith's
Local Media Group portfolio includes 17 television stations
concentrated in large, fast-growing markets, with seven stations in
the nation's Top 25 markets, including Atlanta, Phoenix, St.
Louis, and Portland.
Meredith has agreed to sell its
Local Media Group to Gray Television, Inc., in a transaction that
is expected to close in the fourth quarter of calendar 2021.
Forward-Looking Statements
This press release may contain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995. Statements in this release that are forward-looking
include, but are not limited to, statements regarding the
completion of the sale of Meredith
to Dotdash; the anticipated benefits of the transaction; the
expectation that Dotdash will be one of the largest publishers in
America with enough scale on a pro forma basis to crack into
comScore's top 10, reaching 175 million online consumers monthly,
including 95 percent of US women; the future financial performance
of the combined company; anticipated funding of the transaction;
and the completion of the sale of Meredith Corporation's local
media group to Gray. The use of words such as "may", "will",
"could", "would", "should", "anticipates," "estimates, "expects,
"plans" and "believes," among others, generally
identify forward-looking statements. Actual results could
differ materially from those contained in
these forward-looking statements for a variety of
reasons, including, among others: (i) our respective abilities to
market our products and services in a successful and cost-effective
manner, (ii) the display of links to websites offering our
respective products and services in a prominent manner in search
results, (iii) our continued ability to market, distribute and
monetize our respective products and services through search
engines, digital app stores and social media platforms, as and if
applicable, (iv) the failure or delay of the markets and industries
in which our respective businesses operate to migrate online and
the continued growth and acceptance of online products and services
as effective alternatives to traditional products and services, (v)
our continued ability to develop and monetize versions of our
respective products and services for mobile and other digital
devices, (vi) our ability to engage directly with users,
subscribers and consumers directly on a timely basis, (vii) our
ability to access, collect and use personal data about our
respective users and subscribers, as and if applicable, (viii) the
ability of IAC's Chairman and Senior Executive, certain members of
his family and IAC's Chief Executive Officer to exercise
significant influence over IAC's operations, (ix) our respective
abilities to compete, (x) adverse economic events or trends
(particularly those that adversely impact advertising spending
levels and consumer confidence and spending behavior), either
generally and/or in any of the markets in which our respective
businesses operate, (xi) our ability to build, maintain and/or
enhance our various respective brands, (xii) the impact of the
COVID-19 outbreak on our respective businesses, (xiii) our ability
to protect our respective systems, technology and infrastructure
from cyberattacks and to protect personal and confidential user
information, as well as cyberattacks experienced by third parties,
(xiv) the occurrence of data security breaches and/or fraud, (xv)
increased liabilities and costs related to the processing, storage,
use and disclosure of personal and confidential user information,
(xvi) the integrity, quality, efficiency and scalability of our
respective systems, technology and infrastructure (and those of
third parties with whom we do business), (xvii) changes in key
personnel and (xviii) the risks inherent in the consummation and
success of the proposed acquisition of Meredith by Dotdash and the ability to achieve
the expected benefits thereof, including (among others) the risk
that the parties fail to obtain the required regulatory approvals
or fulfill the other conditions to closing on the expected
timeframe or at all, the occurrence of any other event, change or
circumstance that could delay the transaction or result in the
termination of the acquisition agreement or the risks that IAC's
synergy estimates are inaccurate or that combined company faces
higher than anticipated integration or other costs in connection
with the proposed acquisition. Certain of these and other risks and
uncertainties are (or in the future may be) discussed in IAC's and
Meredith's respective filings with
the Securities and Exchange Commission. Other unknown or
unpredictable factors that could also adversely affect IAC's or
Meredith's business, financial
condition and results of operations may arise from time to time. In
light of these risks and uncertainties, these forward-looking
statements may not prove to be accurate. Accordingly, you
should not place undue reliance on these forward-looking
statements, which are being made as of the date of this press
release. IAC and Meredith do not
undertake to update these forward-looking statements.
Additional Information
Adjusted EBITDA is defined as operating income excluding: (1)
stock-based compensation expense; (2) depreciation; (3)
acquisition-related items consisting of (i) amortization of
intangible assets and impairments of goodwill and intangible
assets, if applicable, and (ii) gains and losses recognized on
changes in the fair value of contingent consideration arrangements;
(4) expenses related to Meredith Corporation's National Media
Group's acquisition, disposition and restructuring related
activities; and (5) expenses associated with the acquisition of
Meredith Corporation's National Media Group by Dotdash.
IAC does not have the ability to prepare a reconciliation of
digital Adjusted EBITDA to Dotdash and Meredith combined net income (loss) for 2021
or 2023 because the forecast for certain expenses following the
acquisition (e.g., stock-based compensation and certain expenses
associated with the acquisition) is not yet complete.
Contact Us
IAC Investor Relations
Mark
Schneider
ir@iac.com
(212) 314-7400
IAC Corporate Communications
Valerie Combs
valerie.combs@iac.com
(212) 314-7361
Meredith Corporate Communications
Erica Jensen
erica.jensen@meredith.com
(515) 284-3404
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SOURCE IAC; Meredith Corporation