Reader's Digest sells to RipplewoodA U.S. investor group led by Ripplewood Holdings LLC will buy Reader's Digest Association Inc. for $2.4 billion, including the assumption of debt.
The board of directors of Reader's Digest, an iconic publishing and direct marketing company, has approved the merger and recommended to the holders of its common stock that they adopt the merger. The deal ends a 16-year run for Reader's Digest as a publicly traded company.
"If this acquisition is completed, it will return RDA to its roots - as a private company," Eric Schrier, CEO of Reader's Digest, said in a letter to employees dated Nov. 16, the day the news was announced. "Much has been written about going private, and of the advantages for some organizations when time-consuming public disclosure and shorter-term, quarter-to-quarter pressures are alleviated."
Mr. Schrier took over as CEO from Thomas Ryder, who said late last year that he would step down as chief executive but remain chairman through 2006.
"Obviously, this is a momentous step," Mr. Schrier wrote. "But it does not fundamentally change what we are trying to accomplish together. And it does not fundamentally change what kind of company we are, or are striving to be."
It was unclear whether the deal would bring management changes at the Pleasantville, NY, company.
