As a 105-year-old magazine and broadcast television company, Meredith (NYSE:MDP) sure doesn't look its age. In fact, at a recent analyst conference, Meredith had a lot to flaunt.

Company snapshot
Meredith focuses on women, with its magazines such as Better Homes and Gardens, Parents, Fitness, and Family. The company also owns 12 local TV stations, 30 websites, a retail book business, three online marketing companies, and a search engine.

Going digital
Let's start with the juicy part. As an "old media" company, Meredith has done an excellent job of building a digital foundation. The company has launched a couple of broadband video networks, and, acquired a health-related search engine called Healia, and generated healthy online subscriber growth. Although online sales only account for 3.5% of total revenue, that's up from 1.3% two years ago.

The broadband network also seems compelling, with powerhouse advertisers like Procter & Gamble (NYSE:PG) and Kraft (NYSE:KFT) signing up for 15-second spots. Meredith is also dabbling in other hot areas like viral word-of-mouth marketing and online brand promotion, and is working with Coca-Cola (NYSE:KO) and Citigroup (NYSE:C) in that business division.

Slow but steady
In the slow but steady core magazine business, Meredith is outperforming the industry and expects 5% ad growth for the first half of 2007, thanks to strong pharmaceutical and food and beverage promotions. Year to date, Meredith's magazines increased advertising pages 11%, compared with 5% for the competition.

Meredith showed off its touch with its Family Circle magazine, which was acquired from Gruner + Jar last year. After buying the magazine, Meredith spruced up the editorial and sales leadership, manifested in 20% ad sales growth year to date.

In the broadcast television space, Meredith piggybacks off the growing economies of its markets in Atlanta, Phoenix, and Las Vegas.

All in all, Meredith's results have been very impressive, and given the strong focus on growth and credible expansion plans, it's not hard to see why the company has grown earnings per share 19% per year for the past five years, or why Meredith's stock, which is up 30% over the past year, is at an all-time high.

That said, the company trades at 18 times forward earnings estimates and 10 times trailing EBITDA (a measure of cash flow). This isn't cheap, but it isn't prohibitively expensive, either. At a $3 billion market cap, Meredith should be able to throw off a 5% to 6% free cash flow yield, which isn't bad for a company growing earnings per share at a high rate.

The private equity put
I'd highly advise against any shareholder buying shares based solely on their expectations that a company will get bought out. However, I like to do "back of the envelope" calculations to see if it makes sense for a private equity firm to buy a company out at the current price. Meredith's net debt level of about $450 million is about 1.5 times EBITDA, so a private equity firm could easily add a ton of leverage onto the company.

If I assume a private equity firm buys Meredith at a 15% premium (so that equity value is $3.45 billion plus net debt of $450 million), I end up with about a $3.9 billion takeout enterprise value.

If I further assume the company leverages trailing EBITDA 10 times, this equals $3.1 billion of debt on $800 million of equity. Then I assume EBITDA increases 20% next year, thanks to organic growth and cost-cutting, a 7% cost of debt, 30% cash taxes, and $15 million in maintenance capital spending.

In this quick and dirty scenario, I calculate a leveraged return of 14% to the private equity firm in the first year, which doesn't seem that great, considering the somewhat aggressive assumptions I used. However, it might be doable considering Meredith's very steady growth rate and stable cash flows. Keep in mind, I am not predicting a buyout, but rather seeing if it could be done.

Although Meredith's stock isn't a screaming buy, it's definitely a company to put on the "high-quality companies I'd like to own someday" watchlist.

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Fool contributor Emil Lee is an analyst and a disciple of value investing. He doesn't own shares in any of the companies mentioned above. Emil appreciates your comments, concerns, and complaints. The Motley Fool has a disclosure policy.