Page last updated at 16:46 GMT, Friday, 9 April 2010 17:46 UK

Reader's Digest UK bought out of administration

A Reader's Digest on sale
Reader's Digest has been published in the UK since 1938

Reader's Digest in the UK has been bought out of administration by Better Capital, well-known private equity veteran Jon Moulton's investment firm.

The 72-year-old British edition went into administration in February after its US parent was unable to support it following a pension fund crisis.

Better Capital said it had backed a management buy-out in a £13m deal.

It said the deal secures the future of the business and the jobs of the 100 people who work for the company.

The US parent has agreed to let the company publish using the Reader's Digest brand under licence.

"It's rare to have an opportunity to back a dynamic management team to run a business with the heritage and brand strength of Reader's Digest," said Mark Aldridge, chief executive of Better Capital.

He said the new management team envisaged no "fundamental changes" to the business.

"With greater investment and expansion through the internet," he said, the magazine could reach a much wider audience.

Bankruptcy protection

Reader's Digest was first published in the UK in 1938 and has suffered from a dramatic fall in readership in recent years.

Despite attempts to modernise, including launching an online edition, its readership has fallen from about two million in the 1990s to under 600,000.

The US parent group, Reader's Digest Association filed for Chapter 11 bankruptcy protection last year after struggling with interest payments on a $2.2bn (£1.4bn) debt, before emerging earlier this year.

Mr Moulton is one of the UK's most high profile private equity investors.

He set up Alchemy Partners in 1997, the company that almost bought MG Rover from BMW in 2000.

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