Jon Werther, Meredith Corp. (Photo by Monica Schipper/Getty Images for Meredith Corpo

Meredith Agrees to Buy Time Inc.

With funds from Koch Industries

Time Inc. agreed to be acquired by Meredith Corp. in a $2.8 billion deal partially financed by Koch Industries, whose owners are known to back conservative causes.

Time Inc., publisher of Time, People and Sports Illustrated, was once part of Time Warner, but when the publishing business soured, it was spun off. Time Warner also spun off Time Warner Cable, which was acquired by Charter Communications, and Time Warner itself has agreed to be acquired by AT&T, though that deal has been delayed by an antitrust suit filed by the Justice Department.

Time Inc. has been trying to diversify into online media and digital video, but it has not recaptured the success of its legacy publishing business. Most recently, Time Inc. launched Sports Illustrated TV.

Related: 'Sports Illustrated' Tries Amazon to Get Into Video Business

Meredith, which owns TV stations in addition to its magazines, said the combined companies would be a multimedia powerhouse.

"We are creating a premier media company serving nearly 200 million American consumers across industry-leading digital, television, print, video, mobile, and social platforms positioned for growth," said Meredith chairman and CEO Stephen M. Lacy.

"We are adding the rich content-creation capabilities of some of the media industry's strongest national brands to a powerful local television business that is generating record earnings, offering advertisers and marketers unparalleled reach to American adults. We are also creating a powerful digital media business with 170 million monthly unique visitors in the U.S. and over 10 billion annual video views, enhancing Meredith's leadership position in reaching Millennials,” Lacy said.

Combined the companies would have revenue of $4.8 billion, including $2.7 billion of ad revenue, of which $700 million would be digital.

Meredith is paying $18.50 a share in the all-cash deal. The transaction was approved by the boards of both companies. The $2.8-billion price tag includes assumed debt.

Meredith said it has secured $3.55 billion in financing from RBC Capital Markets, Credit Suisse, Barclays and Citigroup Global Markets.

It has also secured $650 million in preferred equity from Koch Equity Development. Koch will not have a seat on the board or influence on editorial or managerial operations, Meredith said.