Reader's Digest Association to Acquire, World's Largest Online Home Cooks Community; RDA Expands Leading Position in Food and Cooking Category and Extends its Reach Via the Internet

Mar 31, 2006, 00:00 ET from The Reader's Digest Association, Inc.

    PLEASANTVILLE, N.Y., March 31 /PRNewswire-FirstCall/ -- The Reader's
 Digest Association, Inc. (NYSE:   RDA) today announced an agreement to acquire, an online community food and cooking website that leverages an
 active and growing network of home cooks to generate revenue from advertising
 sponsorships and retail licensing.  The purchase price is approximately $66
 million, and the transaction will be funded using existing debt capacity.  RDA
 expects to complete the acquisition in its fourth fiscal quarter ending June
 30, 2006.  The announcement was made by Eric Schrier, President and CEO of
     (Photo: )
     "We are thrilled that will become part of the Reader's
 Digest family of companies," Schrier said.  "We own the world's largest food
 publishing franchise in Taste of Home, along with a fast-growing tapestry of
 other food and cooking activities.  Our acquisition of will
 provide us with a valuable digital platform to further leverage our position
 as the country's leading food and cooking publisher.  It will enable us to
 bring together online communities from the various RDA properties using the
 common platform of an industry-leading food and cooking affinity." was launched eight years ago as a place for home cooks to
 "meet" and share their favorite recipes.  Since its launch, it has become the
 world's largest online community of home cooks - totaling more than 1.8
 million registered members - making it America's favorite Web destination for
 everyday and holiday recipes.  Each month the site attracts an average of 6
 million unique visitors who collectively view more than 70 million page views;
 during peak holiday months, traffic spikes to more than 9 million unique
 visitors and 111 million page views.  It also includes 30,000 of America's
 favorite recipes, which are created, tested and reviewed by participating home
     "We are delighted to be joining forces with one of the world's marquee
 publishing and marketing companies," said Bill Moore, CEO of
 "Our business is a natural fit with Reader's Digest as it is such a major
 player in the food and lifestyle categories.  We expect to take advantage of
 powerful synergies and marketing opportunities, and we believe that this
 alliance will accelerate our growth both in the United States and abroad.
 Together, we have the potential to increase the scale of the
 audience, revenues and already high profit margins.  And we have the content
 and technology to expand into other lifestyle affinities."
     Moore will report to Bonnie Bachar, RDA's President of U.S. Magazines in
 its RD North America segment.  Bachar said the acquisition
 supports RDA's new strategy of deepening customer relationships built around
 affinities like food, and reaching new and existing customers through multiple
     "As publisher of Taste of Home, the country's highest-circulation food
 magazine, as well as other magazines and books on food and cooking topics, we
 have been seeking additional platforms to leverage our content, and the Web is
 clearly our number one target for this expansion," Bachar said.  "The
 acquisition of this small but fast-growing company supports our goal of
 strengthening RDA's portfolio with new properties that can contribute to long-
 term topline growth."
     For RDA, represents the company's first major Internet
 acquisition and continues an overall strategy of building direct marketing and
 advertising programs across multiple media platforms.  The site will act as a
 portal for RDA's existing food websites, which support its magazine properties
 like Taste of Home and Light & Tasty.  The advertising sales
 force will sell RDA digital advertising related to food, and RDA's cookbooks
 and magazines will be sold on the website.
     RDA's other food-related activities include Every Day with Rachael Ray,
 Taste of Home's cooking schools, an online Taste of Home recipe finder, and
 Taste of Home Entertaining, a new national party plan business that is being
 launched coast to coast in the United States this spring.  In addition to its
 five food magazines, the company markets at retail dozens of magazine specials
 on food, diet, cooking and wellness.  It also sells millions of cookbooks
 every year and created an international best-selling proprietary diet book and
 website, ChangeOne.  Reader's Digest magazine is a major vehicle for food
 advertising, and the company expects to accelerate its online advertising
 growth in that category.
     Michael S. Geltzeiler, Senior Vice President and Chief Financial Officer
 of RDA, said, "The company anticipates that will contribute
 approximately $4 million of EBITDA in the first year, with an expected
 earnings-per-share impact of $(0.01) to neutral.  The acquisition should not
 have a material impact on the company's other initiatives currently underway
 to enhance shareholder value, including its $100 million share repurchase
 program announced last year."
     Geltzeiler added, "The company intends to pursue additional debt capacity,
 most likely through the expansion of its revolver borrowings to provide
 greater flexibility and liquidity, although this will not be necessary to
 consummate this transaction.  This acquisition is consistent with our
 continuing practice of monetizing non-productive assets and strategically
 balancing our portfolio with new assets that can actively contribute to profit
 and topline growth.", with more than 15 million annual visitors, is the world's
 largest test kitchen, offering a window into the habits of home cooks
 everywhere.  The site is an indispensable resource for home cooks who are
 looking for trusted recipes, everyday and holiday meal ideas, practical
 cooking tips, and food advice.  The company is based in Seattle.
     The Reader's Digest Association, Inc. is a global publisher and direct
 marketer of products that inform, entertain and inspire people of all ages and
 cultures around the world.  The company had consolidated revenues for the
 fiscal year ended June 30, 2005, of $2.4 billion.  Global headquarters are
 located at Pleasantville, New York.  For more information, please visit
     This release may include "forward-looking statements" within the meaning
 of the Private Securities Litigation Reform Act of 1995.  Forward-looking
 statements inherently involve risks and uncertainties that could cause actual
 future results and occurrences to differ materially from the forward-looking
 statements.  The Reader's Digest Association, Inc.'s filings with the
 Securities and Exchange Commission, including its reports on Forms 10-K, 10-Q
 and 8-K, contain a discussion of additional factors that could affect future
 results and occurrences.  RDA does not undertake to update any forward-looking

SOURCE The Reader's Digest Association, Inc.