Investment group gets market-leading unit
Time Inc. has sold its Time Life direct-marketing unit, a leading seller of music and video product through television ads and infomercials, to an investment group fronted by former BMG chairman/CEO Strauss Zelnick. Financial terms of the deal were not disclosed.
Under the agreement, Time Life will be owned and operated by Direct Holdings Worldwide LLC--a holding company controlled by Zelnick's asset-management business, ZelnickMedia, and private-equity investor Ripplewood Holdings. Since its founding three years ago, ZelnickMedia has worked closely with Ripplewood on various investment opportunities.
Direct Holdings also owns the Lillian Vernon Corp., a direct-marketer of gift merchandise. As part of the deal, Lillian Vernon and Time Life will share back-end functions such as fulfillment and distribution/marketing platforms.
Zelnick serves as chairman/CEO of Direct Holdings, which, with the addition of Time Life, is expected to have annual revenues in excess of $500 million.
Music and video product will continue to be sold under the Time Life brand. As part of the purchase, Direct Holdings has acquired an exclusive long-term license for the worldwide use of the name in the direct marketing of music, video, books and educational software.
Zelnick says the deal builds on a larger strategy--first initiated over the summer with the purchase of Lillian Vernon--to create a stable of leading direct-marketing brands.
Time Inc. says it is selling the business in order to concentrate on "high-growth opportunities" in its core magazine businesses and brands.