Meredith to buy Time with help from the Koch brothers, but says they won’t have any influence

It’s official—Meredith Corporation will buy Time Inc. in an all-cash transaction valued at $2.8 billion. Meredith said today it agreed to pay $18.50 per share for all outstanding shares of Time Inc. As reported earlier this month by the New York Times, the deal, which is slated to close in the first quarter of next year, includes equity financing from the billionaire Koch brothers, who are known for supporting conservative policy. Meredith said they will have no influence in the combined company.

Meredith has been trying to buy Time Inc. since at least 2013, when its first offer was rejected because the two companies could not agree on what magazine titles would be included in the deal. Meredith approached Time again earlier this year, but those discussions also stalled when Meredith reportedly failed to secure enough bank financing for the acquisition.

Then earlier this month, the New York Times reported that talks were back on after Charles G. and David H. Koch, who own manufacturing conglomerate Koch Industries but are probably better known for their conservative advocacy, agreed to back Meredith’s offer with more than $500 million in equity.

As it turns out, the Koch brothers are contributing more than that. Meredith said that Koch Equity Development, the investment arm of Koch Industries, will contribute $650 million in equity to help finance the deal.

Media watchdogs have expressed concern over the potential influence of the Koch brothers on Time Inc. The siblings fund a non-profit advocacy group called Americans for Prosperity to back conservative candidates and positions and though the Koch brothers were critical of President Donald Trump’s campaign tactics, they have recently become closer with the administration to support its tax reform efforts.

Meredith said in its press release that the Koch brothers will have no influence on how the company is run or its editorial content: “[Koch Equity Development] will not have a seat on the Meredith Board and will have no influence on Meredith’s editorial or managerial operations. KED’s non-controlling, preferred equity investment underscores a strong belief in Meredith’s strength as a business operator, its strategies, and its ability to unlock significant value from the Time Inc. acquisition.”

Meredith’s brands include Better Homes & Gardens, Allrecipes, Parents and Shape. It also runs 17 local news stations in 12 markets. Time Inc. is best known for publishing its eponymous news weekly, but its other titles include Fortune, Entertainment Weekly, People, Sports Illustrated and InStyle.

Meredith said the first two years after the acquisition are expected to generate cost synergies of $400 million to $500 million, which is probably not reassuring to Time Inc. employees considering its multiple layoff rounds this year.

Once the two companies are merged, Meredith says they will serve nearly 200 million consumers, with its digital media business reaching 170 million monthly unique visitors in the U.S. Meredith and Time Inc. made combined revenues of $4.8 billion in 2016, including $2.7 billion in total advertising revenue (with $700 million of that from digital advertising) and adjusted EBITDA of $800 million.