Graham Holdings will acquire all of Leaf Group's outstanding stock for $8.50 per share, representing a 21% premium to its closing price on April 1. The all-cash deal values Leaf Group at roughly $323 million.
After receiving Graham Holdings' bid on Feb. 9, Leaf's Board of Directors tasked Moorgate Securities LLC to shop the deal. After 10 potential buyers declined to submit a competing bid, Leaf's board accepted Graham's offer.
"After thoroughly reviewing the strategic alternatives available to Leaf Group, the Board of Directors concluded that this all-cash premium transaction with Graham Holdings achieved the Board's long-term objective of fully recognizing the value of the business and delivers immediate and substantial cash value to our shareholders," Leaf Chairperson Deborah Benton said in a press release.
Leaf's digital media portfolio -- which includes fitness brands Well+Good and Livestrong.com, as well as art and home design brands Saatchi Art and Society6 -- experienced strong growth during the coronavirus pandemic. Leaf's revenue rose 44% year over year to $65 million in 2020.
As a diversified holding company, Graham Holdings can provide financial support to accelerate Leaf's expansion. "Together, we look forward to continuing to build on the strong momentum Leaf Group generated over the past year, with the additional resources and expertise of Graham Holdings helping us further grow the reach of our young brands and innovate for our customers, creators, and audiences," Leaf CEO Sean Moriarty said.