Reader's Digest is a true American success story. Founded in 1922, the magazine's first print run was 5,000 -- and the retail price was 25 cents. Eventually, the magazine would become the biggest in the world.

But nothing lasts forever. In the case of Reader's Digest, the brand started to get crusty and its financial performance suffered as a result.

Now the company has decided to go private in a $1.6 billion deal. The lead investor is Ripplewood Holdings, which has lots of experience in the media world.

True, Reader's Digest has a diversified set of media assets, such as videos, books, music and so on. However, the company was particularly late in terms of moving onto the Net and in many ways still seems old-fashioned and a bit crusty.

As a result, the price tag is a tepid $17 per share. This is only an 8% premium.

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates InvestorOffering.com.