Time Inc. has signed a definitive agreement to acquire the majority of the stock in Synapse Group Inc, formerly NewSub Services.

Time Inc. owns approximately 25% of the outstanding equity of Synapse from an earlier purchase. Michael Loeb, a founder and the CEO of Synapse, will retain minority ownership in the company and will continue as CEO, the company said.

Financial terms of the transaction were not disclosed, however The Wall Street Journal, citing people familiar with the transaction, put the value of Synapse at more than $500 million.

“Synapse has a solid track record of developing new and effective ways to market magazines,” said Don Logan, CEO of Time Inc., in a statement. “They’ve been a good partner to us and other publishers over the past decade and we’re looking forward to working more closely with them.”

The closing of the transaction is subject to customary closing conditions, including regulatory approval.

The firm, based in Stamford, CT, was founded in 1991 by Loeb and Jay Walker. Loeb is the son of former Time Inc. editor Marshall Loeb. It is a provider of subscriptions for publishers of consumer magazines in the United States. The company distributes magazine subscription offers through a variety of marketing channels. It also sells different types of merchandise and software.

The firm markets over 600 consumer magazine titles as well as hundreds of trade publications and newspapers. Synapse’s net revenues in 2000 were approximately $268 million.

The company was one of the early pioneers of the continuous service model of subscription marketing. Jay Walker said at the time, “The magazine industry is stuck with a marketing mechanism suited to the 19th century as we enter the 21st. We’re in the continuous service business. Auto renewal is a holdover from thinking that says, ‘We’re going to sell magazines in blocks of time.’ Busy active people don’t have time to send in renewals.”

In 1998, circulation expert Dan Capell called NewSub Services “the best single news source for new subscriptions since American Family Publishers started.”

Time Inc. will take a large stake in magazine-subscription marketing company Synapse Group Inc., the Wall Street Journal reported today.

The newspaper, citing people familiar with the transaction, put the value of Synapse at more than $500 million. Co-founder Michael Loeb is expected to remain as CEO of Synapse.

The magazine publishing arm of AOL Time Warner Inc. already owned 25% of Synapse, formerly NewSub Services, in Stamford, CT.

The publisher has agreed to acquire the shares held by outside investors, including General Atlantic Partners, a private equity firm, the report said. The rest of the firm is owned by Loeb and other partners.

Synapse sells magazine subscriptions through credit-card issuers, catalogue companies and airline frequent-flier programs.

Synapse was one of the first to offer consumers the continuous service model of subscription marketing. The method automatically renews subscriptions on a consumer’s credit card, a big savings for publishers.

The firm has 2000 revenue of $268 million, the Journal reported.

Synapse was in 1991 by Loeb and Jay Walker. Loeb is the son of former Time Inc. editor Marshall Loeb.