According to sources, Hearst outbid Meredith Corp. for the company with an offer understood to be more than $250 million — a high number, as Rodale’s revenue is said to be in the neighborhood of $200 million. The deal, which is expected to close in the coming weeks, has been a speedy one because Rodale’s bank loans are said to be coming due.
Rodale put itself up for sale in late June. Since then, bidders including American Media Inc., Meredith Corp. and Hearst have emerged. While AMI has been on a buying spree of late, having snapped up Us Weekly and Men’s Journal from Wenner Media, company chairman and chief executive officer David Pecker expressed interest in just one title, Men’s Health, which the company could combine with Men’s Journal, the now digital-only Men’s Fitness and Muscle & Fitness, Muscle & Fitness Hers and Flex.
Meredith, which has been eyeing potential acquisitions since Time Inc.’s board explored a sale of the firm, was said to be most interested in Runner’s World and Women’s Health. Still, the publisher already owns Shape and has no men’s-centric titles, so the fit would likely be off.
Hearst, which has tried and failed to get into the fitness space with CosmoBody, could penetrate a new market with the Rodale acquisition. It also already has an international joint-venture called NatMag with Rodale. NatMag currently publishes a host of Rodale titles, such as Runner’s World, Women’s Health and Men’s Health. It’s possible that Hearst could spin off some of the titles that do not fit into its portfolio, which includes Elle, Esquire, Harper’s Bazaar, Cosmopolitan and Popular Mechanics.
As for Rodale, the publisher — like most others — has struggled in view of volatility in the print advertising market and readers’ migration away from print to digital. A restructuring had been under way at Rodale over the last few years, which included large-scale layoffs and budget cuts. Earlier this year, the company tried to reinvent its editorial and business side through a reorganization, but some speculated that it was too little, too late.