Gannett nears deal to buy Journal Media.
Gannett, the publishing company that owns 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. The deal could be announced as early as Thursday and value Journal Media JMG, +5.46% at just under $300 million, according to people familiar with the matter. The agreement, announced Wednesday, heralds an era of further consolidation in the U.S. newspaper industry as newly pure-play companies take steps to meet the competitive threat of scaled digital news and advertising businesses. Journal Media had a market value of $192 million at Wednesday’s close, meaning Gannett GCI, +3.75% would be paying a relatively big takeover premium. The deal is expected to add approximately $450 million to the company’s annual revenues and about $60 million in earnings before interest, taxes, depreciation and amortization.
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. Scripps Company and Journal Communications merged their local television operations and spun off their respective newspaper assets into an independent, publicly-traded company based in Milwaukee.
Tegna, whose former name was Gannett, sought the spinoff to mainly focus on television broadcasting and its digital businesses, Cars.com and CareerBuilder.com. Gannett, based in McLean, Va., returned to its own roots as a newspaper company on June 29, 2015 when it completed its own split, creating separate companies focused on local newspapers and local television. When the split was announced in August 2014, then-Gannett executives said the new Gannett would begin operating largely without debt and was poised to be an acquirer in an industry ripe for consolidation.
The companies estimated in a joint news release that the deal will yield an estimated $10 million in immediate savings and the potential for $25 million more over the next two years. Journal Media Group’s newspapers include the (Redding) Record-Searchlight and Ventura County Star in California; the Naples Daily News and Treasure Coast Newspapers in Florida; the Evansville Courier & Press in Indiana; The (Henderson) Gleaner in Kentucky; the (Anderson) Independent Mail in South Carolina; the Knoxville News Sentinel and The (Memphis) Commercial Appeal in Tennessee; the Abilene Reporter-News, Corpus Christi Caller-Times, San Angelo Standard-Times and Wichita Falls Times Record News in Texas; the Kitsap Sun in Washington and the Milwaukee Journal Sentinel and Journal Community Publications in Wisconsin.
Investors and security holders will be able to obtain these materials (when they are available) and other documents filed with the SEC free of charge at the SEC’s website, www.sec.gov. Forward-looking statements include all statements that are not historical facts and can typically be identified by words such as “believe,” “expect,” “estimate,” “predict,” “target,” “potential,” “likely,” “continue,” “ongoing,” “could,” “should,” “intend,” “may,” “might,” “plan,” “seek,” “anticipate,” “project” and similar expressions, as well as variations or negatives of these words. The matters discussed in these forward-looking statements are subject to a number of risks, trends, uncertainties and other factors that could cause actual results and developments to differ materially from those projected, anticipated or implied in the forward-looking statements.