Martha Stewart Living said Wednesday that marketing and media services company Meredith Corp. will take over ad sales, circulation and production of Martha Stewart Living and Martha Stewart Wedding magazines.
The companies did not disclose terms of their deal, but the agreement will take effect Nov. 1 and last for 10 years. The move will allow the Martha Stewart magazines to be marketed alongside Meredith brands like Parents magazine and Better Homes and Gardens. Meredith will also be responsible for sales and marketing of the magazines' websites, and will take over digital assets other than their social media channels.
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Martha Stewart Living Omnimedia Inc. said the deal will increase its annual operating income by $10 million to $15 million. The company said it will take a restructuring charge of $2 million to $3 million in the fourth quarter related to the moves. Most of those costs will be related to severance, but the company did not say how many jobs will be eliminated.
Shares of Martha Stewart Living Omnimedia jumped 93 cents, or 25 percent, to $4.63 in aftermarket trading. Meredith's stock was unchanged at $44.49.
Meredith has recently acquired a spate of brands including Parenting, Baby Talk, and Every Day with Rachel Ray. In 2013, the company launched Allrecipes magazine about a year after it bought allrecipes.com. The Des Moines, Iowa, company was interested in combining with Time Warner Inc. in 2013, but that company ultimately spun off its Time Inc. magazine unit into a separate company.