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International: Ripplewood Holdings to acquire Reader's Digest for $2.4 billion

17-November-2006
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International: Ripplewood Holdings to acquire Reader's Digest for $2.4 billion

The publisher of Reader's Digest, the pocket-sized general-interest magazine, will be acquired for $2.4 billion, including debt, by a consortium led by private equity firm Ripplewood Holdings. Reader's Digest Association's board has approved the offer, in which the investor group will pay $17 a share, a 9.6 per cent premium over the closing price on Wedneday of $15.51.

Based in Pleasantville, New York , Reader's Digest Association publishes more than 20 magazines and online portals. Its flagship, Reader's Digest, has a monthly circulation of about 18 million and is published in 50 editions and 21 languages. The company earned revenue of about $2.4 billion in the fiscal year ending June 30.

"This partnership represents a great opportunity for RDA and its shareholders and employees," Eric Schrier, Reader's Digest Association's Chief Executive, said in a statement.

"We are very excited to reach this agreement to acquire Reader's Digest, a truly wonderful company with a broad array of global assets and growth businesses that are extending a rich heritage," Ripplewood's Chief Executive, Timothy C Collins, said in a statement.

Ripplewood, which has made investments totaling about $3 billion, holds other publishing properties, including Direct Holdings Worldwide, a marketer of entertainment products under the Time Life flag, and WRC Media, a publisher of educational materials through the Weekly Reader, World Almanac and CompassLearning brands.

JP Morgan Chase, Citigroup, Merrill Lynch and Royal Bank of Scotland committed debt financing to the Ripplewood consortium. JP Morgan, Citigroup and Merrill Lynch also served as legal advisers to the Ripplewood group, while Cravath Swaine & Moore provided legal counsel.

Goldman Sachs and Michael R Lynch served as financial advisers to Reader's Digest, and Jones Day and Richards Layton & Finger provided legal counsel.

Source: New York Times

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