The Reader’s Digest Association, Inc., Pleasantville, NY, has agreed to acquire an equity interest in BrandDirect Marketing Inc. and that the companies will develop and market Reader’s Digest-branded membership clubs.
Reader’s Digest will pay $50 million for an 18% share in Shelton, CT-based BrandDirect, an affinity membership-based direct marketing company. In addition, Reader’s Digest will have the option to acquire additional equity in BrandDirect through vehicles such as the exercise of warrants.
Initial efforts will focus on creation of membership clubs in the United States, targeted to Reader’s Digest customers and other databases, and defined by Reader’s Digest brands, such as its special interest magazines like New Choices: Living Even Better After 50; Walking; and The Family Handyman. The partnership includes forming joint ventures outside the U.S.
Reader’s Digest reported worldwide revenues of $2.5 billion for the fiscal year ended June 30.
Founded in 1996, BrandDirect has launched 10 clubs, which are promoted to consumers via direct mail, telemarketing and the Internet using the major bank credit card issuers as marketing partners. It currently has 2.2 million members included in the Field & Stream Club, Children’s Television Workshop Kids Club, IBM Small Business Solutions and Arthur Frommer Budget Travel.
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