Reader’s Digest to be bought by investment group

NEW YORK — Reader’s Digest Assn. Inc. said Thursday that it had agreed to be bought for about $1.6 billion in cash by an investment group led by private equity firm Ripplewood Holdings.

Ripplewood offered $17 for each share of the Pleasantville, N.Y.-based publishing and direct marketing company, a premium of 10% over the stock’s closing price Wednesday of $15.51.

The private equity group would also assume Reader’s Digest’s debt.

In its filing with regulators for the quarter that ended Sept. 30, the company said long-term debt totaled $776.3 million.

Reader’s Digest has struggled in recent years as its direct-marketing and book sales businesses have been challenged by the boom in online book sales from places like Amazon.com.

The Ripplewood-led investment group includes J. Rothschild Group, GoldenTree Asset Management, GSO Capital Partners, Merrill Lynch Capital Corp. and Magnetar Capital.

Shares of Reader’s Digest rose $1.19, or 7.7%, to $16.70.