Meredith Corporation (MDP - Analyst Report) has entered into a deal with Disney Publishing Worldwide to acquire the assets of FamilyFun magazine. This is part of the company’s efforts to explore and include alternate revenue generating channels.
According to the company, the FamilyFun acquisition will include the popular periodical and its special interest publications along with the ToyHopper and digital magazine applications.
Though the financial terms of the deal were not disclosed, the company stated that the buyout will not have any material impact on its financial performance in 2012. Meredith expects to close the deal within a period of 30 days.
Prior to this, the company reached an agreement with the Reader's Digest Association to acquire its renowned and award-winning magazine ‘Every Day with Rachael Ray’. Moreover, the company also acquired EatingWell Media Group and launched Recipe.com.
Meredith’s National Media Group President, Tom Harty stated that the recent developments will fortify Meredith’s market share in parenthood and food category. Further, it will supplement the company in serving its 75 million women consumers better through the strong multi-channel mechanisms to meet the ever increasing demand.
Going with the Publishers Information Bureau data, Meredith’s advertising revenues in the parenthood category magazine is expected to reach 60% with FamilyFun (has around 6 million patrons) in its arsenal.
Meredith will come up with its first issue of FamilyFun in March 2012, thus offering advertisers an additional avenue to reach their target customers.
Meredith is one of the leading media and marketing companies engaged in publishing, broadcasting, integrated marketing and interactive media. The company boasts a strong portfolio of women’s magazines with a relatively stable circulation, which has helped it to gain market share.
The company faces stiff competition from Martha Stewart Living Omnimedia Inc. , which is also not far behind Meredith in terms of strategic alliances to boost growth. In a calculated move, the company sold its 16.6% stake to J. C. Penney Company Inc. (JCP - Analyst Report) last December.
Currently, Meredith retains a Zacks #3 Rank, which translates into a short-term ‘Hold’ rating. Moreover, considering the company’s fundamentals, we have a long-term 'Neutral' recommendation.