NEW YORK — Time Warner has inked a deal to acquire the 51% of Essence Communications Partners it didn’t already own in a bid to gain a powerful marketing vehicle to African-Americans.
Terms of the deal, expected to close next month, were not disclosed.
But sources close to the deal said it values the publishing group at close to $170 million — a significant premium over 2004 earnings — due to the power of the brand and potential of magazines Essence and Suede as well as ancillary businesses such as a book division and concert series.
Time Warner acquired 49% of the company in 2000, and the two companies launched Suede, a fashion mag for young African-American women, as a joint venture.
“There has always been a mutual understanding between us that if they ever wanted to sell the remaining interest, we wanted to purchase it,” said Time Inc. topper Ann Moore.
Deal also reps an exit strategy for Essence founder Ed Lewis, a personal friend of Time Warner chief Dick Parsons and one of the most prominent African-American business execs in New York City.
Lewis, who founded the company 34 years ago, will remain nonexecutive chairman, working part-time with Time Warner as an ambassador for the Essence brand.
Michelle Ebanks, current group publisher, will become president, reporting to Nora McAniff, exec VP of Time Inc.’s Women’s Group, which includes In Style, Real Simple and People.
Essence, second-largest mag geared to African-Americans behind Ebony, has a circulation of 1.06 million. Suede, launched in September, has a circulation of 250,000.