Telegram parent company to buy USA Today publisher for $1.4B
WBJ File Photo
GateHouse Media's holdings in Central Mass. include three daily, five weeklies, one monthly magazine and now the Gardner News.
GateHouse Media, the publishers of the Worcester Telegram & Gazette, Worcester Magazine, the MetroWest Daily News and hundreds of other newspapers in Massachusetts and throughout the country, is acquiring USA Today publisher Gannett in a cash-and-stock transaction.
The companies – the two largest newspaper publishers in the U.S. with a combined 8.8 million subscribers, according to data provider Statista – had been in talks about a possible merger since at least the end of May. The combined company will now be known as Gannett and will be based at Gannett’s McLean, Va., headquarters.
Per the terms of the merger, Gannett shareholders will receive $6.25 in cash and 0.5427 of a share in GateHouse parent company New Media Investment Group for each share they hold, representing a total of $12.06 per Gannett common share. Based on the number of Gannett shares, the purchase price comes to $1.4 billion.
When the deal is complete, Gannett shareholders will own 49.5% of the combined company and New Media shareholders will own 50.5%.
The companies said a loan of nearly $1.8 billion in private equity was secured to pay off debt for both companies and fund the cash component of the merger.
Michael Reed, the chairman and CEO of New Media, will lead the organization, while Gannett’s CFO Alison Engel will continue in that role with the combined company.
Paul Bascobert, the newly appointed Gannett CEO, will retain the title with the combined company’s operating subsidiary.
The rest of the combined company’s executive team will be announced at a later date. Kirk Davis will remain as GateHouse Media’s CEO only until the closing of the deal, according to company memos to employees published by the Poynter Institute. Davis is the former owner of the Holden Landmark Corp, which owned the Worcester Magazine and several other Central Massachusetts weekly papers before they were acquired by GateHouse last year.
The deal is expected to accelerate the transition to digital media and away from traditional print media for both companies, and brings an opportunity to realize cost synergies of up to $300 million annually, according to the acquisition announcement.
In a statement, Reed said the deal will benefit shareholders, employees and journalism.
“Uniting our talented employees and complementary portfolios will enable us to expand our comprehensive, hyperlocal coverage for consumers, deepen our product offering for local businesses, and accelerate our shift from print-centric to dynamic multimedia operations,” he said.
The acquisition is the latest for GateHouse, which has spent more than $1 billion on newspaper acquisitions since emerging from bankruptcy in 2013. Those purchases are often followed by cost-cutting measures like layoffs and voluntary severances.
WBJ Web Partners
Most Recent
Most Recent
0 Comments