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Wednesday, August 9, 2017

New Media Announces Agreement to Acquire Morris Publishing Group Assets for $120.0 Million

BUSINESS WIRE

The owner of the Ottawa Herald, Leavenworth Times, Fort Leavenworth Lamp, Dodge City Globe and Pittsburg Morning Sun has bought the Topeka Capital Journal, along with a number of other newspapers.

NEW YORK - New Media Investment Group Inc. (“New Media”, NYSE:NEWM), one of the largest publishers of locally based print and online media in the United States as measured by number of publications, announced today that it has agreed to acquire many of the newspapers and related assets from Morris Publishing Group, LLC (“Morris”) for $120.0 million, through its subsidiary of Gatehouse Publishing.
New Media is acquiring many of the Morris portfolio of U.S.-based newspaper assets located across Georgia, Florida, Texas, Kansas, Arkansas, and Alaska. New Media is acquiring 79 publications including all eleven dailies, the largest of which are The Florida Times-Union (44,750 daily circulation and 68,591 Sunday circulation), The Augusta Chronicle (26,862 daily circulation and 31,682 Sunday circulation), and the Savannah Morning News (21,588 daily circulation and 26,048 Sunday circulation). In addition to the print publications, the acquisition includes Morris’s Main Street Digital group, substantially all weekly and niche print products and all related websites and digital operations.
“New Media is very excited to welcome the Morris publications and their employees into our Company,” said Michael E. Reed, New Media President and Chief Executive Officer. “For over 80 years, the Morris family has built and operated an incredible collection of local media assets. We are honored that the family has chosen us to uphold the rich tradition of journalism and innovation they have established. This transaction will expand our footprint into new states and add some very attractive markets to our local media portfolio. We see strong synergies between our two companies and look forward to the value creation opportunity that will exist as we combine the portfolios.”
William S. “Billy” Morris III, chairman of Morris Publishing, will remain as publisher of The Augusta Chronicle and will oversee editorial-page policy for the three Morris newspapers in Georgia. Morris said, “Since 1929, the Morris family has had a great love and passion for journalism and the local communities that they serve. However, every newspaper company in America is battling trends and redirected advertising dollars, so it is necessary for newspapers to be part of a large newspaper group to build and maintain the necessary resources to compete. We are deeply grateful for the many friendships and business relationships we have enjoyed for these many years and look forward to the impact the next generation will make.”
The purchase price is within New Media’s stated acquisition range of 3.5x – 4.5x the seller’s LTM As Adjusted EBITDA. The transaction will be funded with cash on the balance sheet. We expect it to be highly accretive to free cash flow with net synergies of $10-15 million. We expect the transaction to close early in the fourth quarter.
Moorgate Securities and Avondale Communications acted as financial advisors to Morris Publishing Group in connection with this transaction.

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