Business

Martha Stewart's company bought for $200M by Sequential Brands

Martha Stewart Living Omnimedia Inc. will be bought by lifestyle product conglomerate Sequential Brands in a deal that values the company at about $200 million US.
The company that bears Martha Stewart's name was bought out on Monday in a deal that values her household empire at around $200 million US. (Charles Sykes/ Associated Press)

Martha Stewart Living Omnimedia Inc. will be bought by lifestyle product conglomerate Sequential Brands in a deal that values the company at about $200 million US.

Last week, the stock ran up almost 40 per cent to just under $7 a share on rumours of a deal. On Monday, Sequential confirmed in a press release that it will buy the entire company for $6.15 a share.

With 32.4 million shares outstanding, that values the company that bears the domestic doyenne's name at just under $200 million. Sequential says it will pay shareholders half in cash and half in shares of the new company.

Martha Stewart herself is part of the deal, as a clause in the contract confirms she will be staying on as chief creative officer of the new company.

Fall from grace

The offer price is a shadow of the company previous worth.

After being founded in 1997, Martha Stewart Living Omnimedia grew to be worth roughly $2 billion as the founder's name was emblazoned on everything from magazines to TV shows and various household products.

On the day of its IPO in 1999, the shares trade at just under $50 a share. Monday's deal price is a little over 10 per cent of that.

The company gained even more notoriety in 2004 when its CEO was convicted of conspiracy, obstruction of justice and lying to investigators looking into allegations of insider trading in stock of a company called ImClone. Stewart spent time in jail for her role in the scandal, although she was found not guilty of insider trading.

Corrections

  • A previous version of this story incorrectly said Martha Stewart was convicted of insider trading. She was found not guilty on that charge, but was convicted on conspiracy, obstruction of justice and two counts of lying to investigators.
    Jun 23, 2015 10:09 AM ET

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