Gannett confirms $280 million acquisition of Journal Media Group


McLean, Va.-based USA Today publisher Gannett Co. Inc. confirmed Wednesday evening that it plans to acquire Milwaukee Journal Sentinel parent Journal Media Group for about $280 million.Newspapers

The deal has been approved by both companies’ boards of directors and will now go to Journal Media Group shareholders and federal regulators for approval. Each shareholder would receive $12 per share in cash, which would be a 44.6 percent premium, based on the stock’s closing price on Wednesday. The deal is expected to close in the first quarter of 2016.

Milwaukee-based Journal Media Group was formed April 1 through the merger of Milwaukee’s Journal Communications and The E.W. Scripps Co. The newspaper and publishing operations were spun off and combined in the new Milwaukee-based company Journal Media Group, which has about 3,000 employees nationwide. The group includes the Milwaukee Journal Sentinel and its digital products, and daily newspapers and related digital offerings in 13 other U.S. markets, which include the Naples Daily News, the Knoxville News Sentinel and the Corpus Christi Caller-Times.

If the deal is completed, Gannett will oversee publications in 106 U.S. markets serving more than 100 million unique domestic digital visitors per month. The company expects to realize cost savings through shared printing and distribution assets and consolidated functions.

Gannett expects to add about $450 million to its revenues through the acquisition and about $60 million of adjusted EBITDA, including more than $10 million in “immediately available synergies,” with another $25 million in operating synergies expected over the next two years as the companies consolidate administrative and corporate operations, integrate with shared service centers and consolidate certain printing and distribution assets in adjacent markets.

“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,” said Tim Stautberg, president and chief executive officer of Journal Media Group. “Both Journal Media Group and Gannett are guided by a vision of strengthening lives and communities, and we’ll be better stewards in our local markets by sharing ideas, content and best practices among our new and larger family.”

“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,” said Robert Dickey, president and CEO of Gannett. “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.

“We would also like to welcome the outstanding leadership, journalists, sales staff and other employees of Journal Media Group to the Gannett family. Our combined company will be an industry leader, dedicated to the local communities we serve, committed to generating value for shareholders and empowering communities to connect, act and thrive.”

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Molly Dill, former BizTimes Milwaukee managing editor.

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