American Health to Reader's Digest

Publication:
Chicago Sun-Times
Publish date:
January 9, 1990
Author:
Nancy Millman


Reader's Digest Association, long rumored to be a suitor for American Health magazine, has signed an agreement to purchase the publication for $29.1 million.

American Health, the flagship of privately owned American Health Partners, has circulation of more than one million, with advertising revenues of about $12 million annually. Launched in 1982 by Owen Lipstein, the magazine was the foundation of a media company that now includes Mother Earth News, Psychology Today and Smart.

Lipstein, a casual 38-year-old publishing entrepreneur who keeps his office open to his golden retrievers, expanded his innovative firm with magazines that fit the changing interests of affluent young consumers. But the acquisitions of Mother Earth News and Psychology Today, as well as the recent launch of Smart, a glossy men's magazine, have strained the financial resources of Lipstein's company.

Many of the editorial and ad sales staffers will stay with the magazine under its new ownership, Lipstein said, and he will remain as a consultant to American Health for a few years as part of the deal.

Reader's Digest, which over the past few years has bought magazines including Family Handyman, New Choices and Travel-Holiday, recently indicated that further expansion was in its plans.

In a filing with the Securities and Exchange Commission late last month in its preparation to make a public offering of its stock, the company said plans for acquisitions and launches in the United States and abroad were behind its interest in raising as much as $550 million on the public market.

Reader's Digest magazine has worldwide circulation of 16.2 million. The magazine and the company's other publishing and entertainment interests had revenues of $1.8 million for the last fiscal year. CHANGES AT GRANT/JACOBY

Grant/Jacoby, the $65 million Chicago ad agency, is moving in a new generation of top management with the retirement of Chairman Robert L. Flink.

Flink, 65, had been with the agency since 1961 and helped bring it from a company that specialized in sales promotion to one with full-service capabilities. Current clients include Ameritech Mobile Communications, Borden snack foods including Jays potato chips, Lowe Industries cat-care products and Culligan, among others.

Succeeding Flink as chairman is Bruce I. Carlson, 54, who continues as chief executive officer. Carlson, who has worked on the account management side of the agency, has been at Grant/Jacoby since 1960.

R. Milton Lynnes, also 54, who has been executive vice president and executive creative director, moves up to be president and chief operating officer. Carlson and Lynnes are the primary shareholders of the privately held agency, while other managers also own stock. SUN-TIMES PICKS FINALISTS

The Chicago-Sun Times has selected Haddon Advertising; Zechman & Associates; McConnaughy Barocci Brown, and Zwiren Collins Karo Trusk & Ayer as finalists for the creative portion of its advertising account.

The four will develop creative presentations, and a decision is expected this month. Sun-Times advertising currently is handled in-house. BURGER KING DEALS

Grand Metropolitan PLC, the London-based owner of Burger King, is progressing with its plan to make Burger King an international competitor to McDonald's.

The latest move is the purchase of 20 Wimpy franchised restaurants in the United Kingdom to be converted to Burger Kings. There currently are 60 Burger Kings in the U.K., and the company said it anticipates having 200 there by the end of the year.

D'Arcy Masius Benton & Bowles, which handles half of the Burger King advertising business in the United States, is the agency in the U.K.

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