IAC’s Dotdash to acquire Meredith’s National Media Group for $2.7 billion

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Internet holding company IAC, led by media mogul Barry Diller, has agreed to acquire Meredith Corp.’s National Media Group for $2.7 billion, the companies said Thursday.

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why it matters: The deal makes it one of the largest food, home and lifestyle media companies in the world.

  • Meredith has about two dozen brands, With titles like “Better Homes and Gardens” and “All Recipes”.
  • Dotdash has 14 brands, including “Simply Recipes” and “The Spruce.”

description: According to data from DotDash, the combined company will reach approximately 175 million unique visitors per month. The company says that 95% of the audience is women.

  • price ceiling: IAC is buying Meredith’s National Media Group, part of the company that owns about two dozen lifestyle magazine brands, for $42.18 per share.
  • Financing: The deal will be financed with a $1.6 billion loan in IAC cash and Dotdash Meredith. In a statement, IAC said it has received a commitment for the bridge facility worth $850 million and long-term financing at Dotdash “expects to be received before closing.”
  • Leadership: The combined company will be led by DotDash CEO Neil Vogel, who has been with IAC for nearly nine years.

Be smart: While companies’ brands are complimentary, their revenue models are different. Meredith makes most of its revenue from things like subscription and licensing partnerships. Dotdash makes most of its revenue from ads and e-commerce.

  • “Meredith’s brands are incredibly complementary to our brands,” Vogel said on an investor call after the transaction was announced. He said both of his companies focus on content that “helps people get inspired and helps them answer questions.”
  • Because both companies are focused on evergreen content, they both rely more digitally on search delivery and brand familiarity than on social media distribution. This is important, given that the depreciation of third-party cookies is making it harder for companies that rely on social media ads.

Catch up quickly: DotDash was created in 2017 when IAC bought and rebranded About.com from the New York Times four years earlier.

  • it’s since crores invested Dollars spent improving About.com’s content and building small, distinctive brands with evergreen, “how-to” content. It has also acquired several new websites such as Simple Recipes, Serious Eats, Liquor.com, TreeHugger, Byrdie, Brides and MyDomaine.
  • Today, Dotdash is one of the most profitable digital media holding companies, valued at approximately $2 billion, and is IAC’s fastest growing business.
  • Meredith used to be a magazine and local TV business. Earlier this year, it announced the sale of its local media conglomerate Gray Television for $2.7 billion in cash.
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big picture: The deal broadly aligns with IAC’s corporate strategy of building brands and spitting them back into the public market as they mature. It recently ousted Vimeo in 2020 and Match Group in 2019.

What will happen next: The deal is expected to close by the end of the year.


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