Gannett Co to buy Journal Media for $280 million

The deal adds Journal Media publications-which include a handful of dailies besides the Journal Sentinel as well as dozens of community papers throughout the Midwest and South-to Gannett’s network of 92 mostly small- and medium-market daily newspapers in the U.S.to create a portfolio that would reach 106 US markets, the companies said. That is a 45% premium from the Wednesday closing price of $8.30. “These markets complement our existing footprint while increasing our audience substantially”.

In June, Gannett announced several major changes with the closure of its offset printing facility in Maple Grove, Minnesota, where regional copies of USA Today were also printed.

Under the terms of the transaction, which was unanimously approved by the boards of directors of both companies and is subject to Journal Media Group shareholder approval, Journal Media shareholders will receive cash of $12 per share.

“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”, Dickey said.

Tegna, whose former name was Gannett, sought the spinoff to focus mainly on television broadcasting and its digital businesses, Cars.com and CareerBuilder.com.

In an interview, Stautberg said Gannett contacted Journal Media Group about a merger in July, shortly after Gannett’s split from television.

Tim Stautberg, president and CEO of Journal Media Group said the “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”.

He added that it also would consider smaller markets of more than 500,000 people-but only as a purchase of a larger media group.

Journal Media was formed earlier this year after E.W. Scripps Co and Journal Communications merged their newspaper operations. Other logical targets would be a few of the properties owned by Digital First Media, especially their California groups, assuming DFM owners would sell their assets piecemeal.

Gannett pointed out that the acquisition would add about $450 million to Gannett’s yearly revenue and about $60 million of “adjusted EBITDA”, or earnings before interest, taxes, depreciation and amortization.

Integrating the companies would result in about $10 million of “synergies”, or savings, with an opportunity to for an additional $25 million in the next two years, it said.