Reader's Digest Assoc. Sold for $2.4 Billion

Ripplewood Holdings Grabs a Storied Media Company

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NEW YORK ( -- In private equity's latest striking incursion into the media business, a group of investors led by Ripplewood Holdings has struck a deal to buy Reader's Digest Association for about $2.4 billion including the assumption of debt.
Reader's Digest Association has been sold for $2.4 billion.
Reader's Digest Association has been sold for $2.4 billion. Credit: Hoag Levins

Private investors have been circling and pursuing media assets with increasing enthusiasm as changes to the business have both weakened some traditional companies and created opportunities to reach consumers. Time Inc., for example, is taking bids at the end of the month on 18 magazines that it would like to sell to another magazine publisher, but the most interest seems to have come from private-equity players.

"This partnership represents a great opportunity for RDA and its shareholders and employees," said CEO Eric Schrier in a statement this morning. "I look forward to working with Ripplewood in continuing to drive the growth of this great company."

Ripplewood CEO Timothy C. Collins said the buyers were excited by the deal for Reader's Digest Association, "a truly wonderful company with a broad array of global assets and growth businesses that are extending a rich heritage."

A good fit
The acquiring investors also include the J. Rothschild Group, GoldenTree Asset Management, GSO Capital Partners, Merrill Lynch Capital Corp. and Magnetar Capital. The deal is expected to close in the first quarter next year. Reader's Digest -- which has built its business on direct marketing and maintains enormous consumer databases -- makes a good fit with its buyers' existing portfolio. Ripplewood, for example, has investments in Direct Holdings Worldwide, a direct marketer using the Time Life brand, and WRC Media, a publisher of educational supplements under brands such as Weekly Reader, World Almanac and CompassLearning.

Reader's Digest won't become the Ripplewood Digest, but the change in management still represents big change for a company founded in 1922, when DeWitt and Lila Wallace published the first issue of the company's namesake magazine. Even if the flagship title doesn't hold much buzz for 20-something media planners in New York these days, the company and the title's expansion over the decades has been remarkable.

'Every Day'
Reader's Digest Association, based in Pleasantville, N.Y., went public in 1990, launched Every Day With Rachael Ray last fall and reported nearly $2.4 billion in global revenue for the 12 months that ended June 30 -- essentially the same figure reported one year prior.

The founders used their success to establish a group of family philanthropies. By 2003 they group had coalesced into a single Wallace Foundation, which also divested all of its stock in the company -- holdings that once could have proved an impediment to the deal announced today.
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