Gannett Co, publisher for USA Today has signed an agreement to acquire Journal Media Group, a newspaper company for $280 million. Journal Media Group shareholders will receive cash of $12 per share in cash. The deal would be financed by Gannett through a combination of cash on hand and borrowings under Gannett’s $500 million revolving credit facility.
Formed in April this year by merging E W Scripps Co with the newspaper operations of Journal Communications, JMG owns 178 year-old Milwaukee Journal Sentinel among 16 other daily newspapers, 18 weeklies and their affiliated websites across 14 US markets.
Further to the acquisition, Gannett will have its market presence in 106 US markets and result in a “combined digital audience of more than 100 million unique visitors a month. The company claims their print circulation will also increase by about 950,000 Sundays and 675,000 weekdays. Apart from expanding in the media markets, it is expected to boost the revenue of the company. It is said to add about $450m to Gannett’s annual revenues and also help in saving $25 million in the next couple of years with the merging of printing and distribution assets.
Robert J. Dickey, president and CEO of Gannett said, “The publications of both Gannett and Journal Media Group have a rich history, a commitment to journalism, and a dedication to informing and being active members in the communities we serve. Our merger will combine the best of each of our organizations to create a journalism-led, investor-focused company which will provide substantial value to the shareholders of both companies. This transaction is an excellent first step in the industry consolidation strategy we have communicated to our shareholders and is a good example of the value-creating opportunities we believe are available.” He also added, “We would also like to welcome the outstanding leadership, journalists, sales staff and other employees of Journal Media Group to the Gannett family.”
Tim Stautberg CEO of JMG said, “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.”
The acquisition deal is expected to come to closure in the first quarter of 2016 and is subject to JMG shareholder approval and antitrust regulatory clearance.