Hearst Acquisition of Rodale Indicative of Larger Consolidation Trend
Hearst has agreed to buy Rodale Inc., in a deal that was widely anticipated by the magazine industry. While there was no mention of the sale price, it is believed that the company sold for well under $250 million.
Rodale, which is based in New York and Emmaus, Pa., publishes Men’s Health, Women’s Health, Prevention, Rodale’s Organic Life, Runner’s World and Bicycling. It also includes Rodale Books and an international division with which Hearst already has a joint venture. The company boasts 93 editions in 64 countries. Hearst Magazines includes 300 editions and web sites around the world, including 20 titles in the U.S.
Insiders said the New York-based Hearst absorbed Rodale’s hefty, unfunded pension liability, which is in excess of $30 million in debt, a string of bad real estate deals and vendor contracts with various partners such as Quad, CDS, Cognizant and Axiom, as well as the liens and liabilities against Rodale out in Emmaus. So, in the end, the deal may have closed at around $100 million or less. One source characterized the deal as a “stunning collapse” of Rodale. The collapse is indicative of a broader change in the magazine industry, as smaller publishers, such as Wenner Media, are now closing or selling off titles.