Martha Stewart Living Omnimedia Sold for $353 Million

Sequential Brands Group Is the Buyer

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Martha Stewart
Martha Stewart Credit: Peter Foley/Bloomberg

What's the perfect place setting for a multimillion dollar deal? That's a question for Martha Stewart any time, really, but especially on Monday after Sequential Brands Group, a retail licensing company, agreed to buy Martha Stewart Living Omnimedia for about $353 million.

Martha Stewart Living Omnimedia, or MSLO, includes Martha Stewart Living and Weddings magazines, cooking shows for PBS and a range of branded home and lifestyle products. The company, which was founded in 1997, was valued at nearly $2 billion when it went public two years later. But it has struggled lately due in large part to declining advertising sales at its magazines with revenues tumbling at the company, which is unprofitable.

With its media business faltering, MSLO has tried to recast itself as a merchandising company. "This merger is positioned to further the growth and expansion of the unique Martha home and lifestyle brand," Ms. Stewart said in a statement.

Ms. Stewart will stay on as chief creative officer, the companies said.

The acquisition comes roughly 18 months after Dan Dienst, known as a corporate turnaround man, became chief executive of MSLO. Mr. Dienst, a former metals industry executive who wears cowboy boots to MSLO's Chelsea headquarters, has reined in costs through layoffs and corporate wheeling and dealing.

Last October, MSLO handed off the production and business operations -- including ad sales -- of Martha Stewart Living and Weddings magazines to Better Homes and Gardens publisher Meredith for 10 years. That means MSLO staff continues to produce the content, with Meredith paying the company a fee as well as sharing profits from producing and distributing the magazines and sharing revenue from digital advertising sales, according to filings with the SEC.

A spokesman for Meredith said the MSLO acquisition doesn't affect the 10-year agreement.

MSLO's revenue declined nearly 50% year-over-year in the first quarter of 2015 to $17 million as a result of the deal. Publishing revenue fell to $5.7 million from $19.5 million the prior year. That's because revenue and operating cost associated with Martha Steward Living magazine are now on Meredith's books, with the exception of the cost to produce the content. MLSO narrowed its publishing business's operating loss slightly during the quarter.

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