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Potential Bidders Circle Rodale as Publisher Preps for Sale

Potential Bidders Circle Rodale as Publisher Preps for Sale
From WWD - July 9, 2017

A sale of Rodale Inc., the family-owned publisher of magazines such as Mens Health and Womens Health, could potentially come before the end of the summer.

The company, which revealed that it was putting itself up for sale late last month, is already getting interest from a handful of publishers, including American Media Inc., Hearst and Meredith Corp., even though it has yet to put its book out, sources said. (That doesnt seem to matter much as both Hearst and Meredith made a run at Rodale in the past).

Although some have put Rodales valuation in the $100 million-range, others put it at $200 million to $300 million. It believed that the media firms revenues are between $200 million and $250 million and that profits are in the low single-digit millions. For context, in 2015, The Wall Street Journal reported that Rodales sales were between $300 million and $350 million, which was down from more than $600 million in 2008.

According to sources, Rodale will release itsbook within the next two weeks, and it is believed that some sort of deal could come in the next six weeks.The immediacy of a possible deal is likely due to the fact that Rodale is said to owe money on its bank loans. An insider pointed out that the speed of the deal could be linked to the fact that advertising plans for 2018 were already being plotted out and that any acquiring media companies would want to incorporate Rodales new titles into their portfolios to show scale.

A Rodale spokeswoman declined to comment.

Returning to the suitors, AMI chief executive officer David Pecker has been vocal about his interest in Rodales Mens Health title. Following his companys acquisition of Mens Journal from Wenner Media, he told The New York Times that he intended to pursue Mens Health very aggressively. If it succeeds in buying Mens Health, AMI could consolidate the mens fitness market, as it would join its other titles Mens Journal, Mens Fitness, Muscle & Fitness, Flex and Muscle & Fitness Hers.

But Rodale would not likely sell off its biggest title and continue as a publishing house, insiders said. A more likely scenario would be a total sale of the company, which would be dismantled for parts or select titles.

Insiders believe Mens Health alone could go for between $100 million and $150 million, and Womens Health could sell for between $75 million and $100 million, for instance. Theres also Runners World, Rodale Books and Rodales International division, among other assets. Other titleslike the ad-free Prevention, Rodales Organic Life and e-commerce site Rodalesare viewed as less important, to put it nicely.

Another plausible suitor is Hearst Magazines, which is said to have its eye on Womens Health, Runners World and Rodale International. Hearst tried unsuccessfully to enter the fitness space in recent years when it launched and quietly shuttered CosmoBody. On the international side, Hearst and Rodale had formed a venture called NatMag, which publishes some of its magazines abroad, so it would make sense for Hearst to acquire that piece of the business.

Hearst did not return requests seeking comment on its interest in Rodale.

Lastly, Meredith, which had been a leading contender to acquire Time Inc. earlier this year, is in the market for an acquisition. A representative from Meredith told WWD: We are always interested in adding attractive media properties to our portfolio. We have tremendous respect for Rodale and its brands and look forward to participating in the process.

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