Meredith Set to Buy Allrecipes From Reader’s Digest (Updated)

Meredith Corp., best known for its old-line magazine business, is set to get a big digital boost. The publisher is buying Allrecipes, the world’s biggest food Web site, from Reader’s Digest Association, according to a source familiar with the transaction.

I don’t have a purchase price, but previous reports have suggested that Reader’s Digest, which started auctioning off the site last fall, could get $200 million or more for the property. My source tells me the deal should be announced shortly, likely as soon as Tuesday. I’ve left messages for executives at both Meredith and Reader’s Digest, though I’m not expecting an answer given the late/early hour. (Update: Meredith, via a press release, confirms the deal and says the transaction is “valued at $175 million.”)

The deal should more than double Meredith’s existing Web presence. Reader’s Digest says Allrecipes attracts more than 36 million monthly unique visitors; Meredith says its Web sites, which include sites for magazines like Better Homes and Gardens and Parents, attract some 25 million uniques.

Last fall, Reader’s Digest said Allrecipes had lost $1.9 million on $18 million in sales through the first nine months of 2011, but it expected revenues to spike during the holiday quarter. At the time, it said revenue was growing by nearly 10 percent a year, while traffic was up 41 percent.

Reader’s Digest is a privately held holding company that includes the well-known flagship magazine, as well as titles like Taste of Home. The company exited bankruptcy protection in 2010; last year, The Wall Street Journal reported that the holding company had considered selling all of its assets in one transaction, in hopes of fetching as much as $1 billion.

This will be Meredith’s second purchase from Reader’s Digest in several months. In October 2011, it bought Every Day With Rachael Ray magazine and its Web site from the company.