Gannett Journal Media Group: $280M Newspaper Deal
Published: October 8, 2015
Gannett Journal Media Group: $280M Newspaper Deal, Gannett, the publishing company that owns the Reno Gazette-Journal, USA Today and media businesses in 92 local markets, said late Wednesday that it has agreed to buy Journal Media Group for about $280 million, following through on its strategy of acquiring additional local news outlets after it was spun off from its former parent in June.
Shareholders of Milwaukee-based Journal Media Group will receive $12 a share in cash. That is a 45% premium from the Wednesday closing price of $8.30.
“This acquisition is a perfect fit for Gannett,” said John Maher, president and publisher of RGJ Media. “These markets complement our existing footprint while increasing our audience substantially.”
Journal Media Group owns the 178-year-old Milwaukee Journal Sentinel, The Commercial Appeal of Memphis, 13 other daily newspapers, 18 weeklies and their affiliated websites in 14 local markets in the U.S.
The deal is expected to close in the first quarter of 2016. It was approved by both companies’ boards of directors and is subject to approval by Journal Media Group shareholders.
Shares of Gannett closed at $14.94, up almost 4 percent.
Gannett, based in McLean, Va., will finance the deal through cash and borrowing under the company’s $500 million revolving credit line. “Gannett is excited to be joining forces with an organization that is so respected by their communities and industry,” Gannett CEO Robert Dickey said.
After the deal, Gannett will have a media outlet in 106 local markets in the U.S. Its print circulation will rise by about 675,000 on weekdays and 950,000 on Sundays, it said.
In late June, Gannett split from its former parent, now called Tegna. Gannett is focusing on USA TODAY and local markets, 10 of which are in Wisconsin. Tegna, formerly called Gannett, is mainly focusing on TV broadcasting and its digital businesses, Cars.com and CareerBuilder.com.
Once the proposed merger with Journal Media Group is completed, the combined company “will benefit from the consolidated functions Gannett has established over the last several years,” Gannett said.
For some time, Gannett has been consolidating some internal operations, centralizing newspaper design, copy-editing and certain other functions.
“This transaction marks a critical next step in the transformation of our industry as we build local media brands that matter at a time when operational scale is a competitive advantage,” said Tim Stautberg, CEO of Journal Media Group.
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