Reader’s Digest to be bought by investment group
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NEW YORK — Reader’s Digest Assn. Inc. said Thursday that it had agreed to be bought for about $1.6 billion in cash by an investment group led by private equity firm Ripplewood Holdings.
Ripplewood offered $17 for each share of the Pleasantville, N.Y.-based publishing and direct marketing company, a premium of 10% over the stock’s closing price Wednesday of $15.51.
The private equity group would also assume Reader’s Digest’s debt.
In its filing with regulators for the quarter that ended Sept. 30, the company said long-term debt totaled $776.3 million.
Reader’s Digest has struggled in recent years as its direct-marketing and book sales businesses have been challenged by the boom in online book sales from places like Amazon.com.
The Ripplewood-led investment group includes J. Rothschild Group, GoldenTree Asset Management, GSO Capital Partners, Merrill Lynch Capital Corp. and Magnetar Capital.
Shares of Reader’s Digest rose $1.19, or 7.7%, to $16.70.
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