How does Meredith Corporation, which owns a mix of television stations, magazines and digital assets, plan for potential acquisitions or “transformational opportunities” as some analysts call them? Read how Meredith sees the M&A landscape.
“Overall, we’re very broad-minded” and look for opportunities that can add to the company’s shareholder return strategy, Meredith Chair/CEO Steve Lacy said at an investor conference this week.
The company considered, and ultimately walked away from, deals for broadcast and digital last year, he said without naming those. “The challenge with acquisitions is … it’s not like shopping at Target and you pluck that off the shelf.”
Meredith has a team trying to gin up opportunities all the time he says, looking to see if a deal potentially meets “our ROI criteria.”
Because of the FCC incentive auction which is now underway “it’s quiet and there’s no deal flow” for television right now. He predicts that will heat up after the election and after the auction, meaning early 2017.
Magazine acquisitions are a different animal. It’s “difficult to try to pry these properties out of owner’s hands,” said Lacy. He recalled it took 18 months to complete the acquisition of Martha Stewart Living and an untold number of dinners with Stewart herself to convince her it would be a good deal.
There are great opportunities now in the digital space and Meredith “has a significant list we’re looking at,” according to Lacy, however none could be said to be “transformational.” Maybe one has an owner that doesn’t have the advertiser relationships Meredith has or they need content help or have an owner that has “run out of patience.”
And Meredith is so careful because, “there are many, many digital businesses out there that make no money.”
Yet they keep looking for potential M&A deals because Lacy says: “One of my goals is to have enough dry powder so when those acquisitions” that do fit the criteria “come along, we are in a position to capitalize and execute.”
