Adds approximately $450 million to Gannett’s revenues
$35 million annual synergy opportunity
Immediately EPS accretive
MCLEAN, Va. & MILWAUKEE--(BUSINESS WIRE)--Oct. 7, 2015--
Gannett Co., Inc. (NYSE: GCI) (“Gannett”) and Journal Media Group, Inc.
(NYSE: JMG) (“JMG”) announced today that they have entered into a
definitive merger agreement under which Gannett will acquire all of the
outstanding common stock of Journal Media Group for approximately $280
million, net of acquired cash.
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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 Group shareholders will
receive cash of $12.00 per share in cash. Based on the closing price of
Journal Media Group on October 7, 2015, this represents a premium of
44.6%. Gannett will finance the transaction through a combination of
cash on hand and borrowings under Gannett’s $500 million revolving
Robert J. Dickey, president and chief executive officer of Gannett said,
“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. 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,”
“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
The combination of Journal Media Group and Gannett will create a
portfolio of 106 local markets in the U.S. and will result in a combined
digital audience of more than 100 million unique domestic visitors a
month. The acquisition will also enable the combined company to realize
significant operating efficiencies. The properties in Journal Media
Group’s markets will benefit from the consolidated functions Gannett has
established over the last several years. Additionally, the regional
proximity of some of the Journal Media Group markets will also enable
Gannett to further utilize its printing and distribution assets.
Adds approximately $450 million to Gannett’s annual revenues.
Adds approximately $60 million of adjusted EBITDA, including over $10
million of immediately available synergies.
Opportunity for approximately $25 million of additional operating
synergies to be fully realized over the next two years via the
consolidation of corporate and administrative operations, integration
with the Gannett shared service centers and consolidation of certain
printing and distribution assets in multiple adjacent markets.
Immediately EPS accretive: approximately $0.10 - $0.15 per share in
the first full year and $0.20 - $0.25 in the second year.
Adds 15 dailies and 18 weeklies in 14 local markets, in nine states;
includes key markets such as Milwaukee, WI and Memphis and Knoxville,
Adds daily and Sunday circulation of approximately 675,000 and
Adds more than 10 million unique digital domestic visitors a month.
Leverages Gannett’s existing industry-leading content and national USA
TODAY brand, enables the integration of Journal Media Group properties
onto Gannett’s Digital Platform, and delivers additional scale for
The transaction is not expected to disturb the tax-free treatment of the
prior transactions between The E.W. Scripps Company and Journal
Communications, Inc. whereby Journal Media Group has previously agreed
to indemnify Scripps for the adverse tax consequences emanating from its
actions or failures to act following the closing of that transaction.
Journal Media Group, prior to entering into the merger agreement with
Gannett, has delivered an unqualified tax opinion from its law firm to
Scripps, which opinion Scripps has deemed to be acceptable in form and
The receipt of cash for shares of Journal Media Group will be a taxable
transaction for U.S. federal income tax purposes. In general, a holder
of Journal Media Group common stock will recognize a gain or loss in an
amount equal to the difference between the amount of cash received in
the merger and the holder's adjusted tax basis in the shares.
This transaction is subject to customary closing conditions, including,
approval of the merger by holders of a majority of the outstanding
shares of Journal Media Group common stock and antitrust regulatory
clearance. The transaction is expected to close in the first quarter of
Stephens Inc. is acting as financial advisor to Gannett, and Skadden,
Arps, Slate, Meagher & Flom LLP is acting as legal advisor to Gannett.
Methuselah Advisors is acting as financial advisor to Journal Media
Group, and Foley & Lardner LLP is acting as legal advisor to Journal
Gannett Co., Inc. (NYSE: GCI) is a next-generation media company
committed to strengthening communities across our network. Through
trusted, compelling content and unmatched local-to-national reach,
Gannett touches the lives of nearly 100 million people monthly. With
more than 110 markets internationally, it is known for Pulitzer
Prize-winning newsrooms, powerhouse brands such as USA TODAY and
specialized media properties. To connect with us, visit www.gannett.com.
About Journal Media Group
Journal Media Group (NYSE: JMG), headquartered in Milwaukee, is a media
company with print and digital publishing operations serving 14 U.S.
markets in nine states, including the Milwaukee Journal Sentinel,
the Naples Daily News, The Commercial Appeal in
Memphis, and Ventura County Star in California. Formed in
2015 through a merger of the newspaper operations of The E.W. Scripps
Company and Journal Communications, Inc., the company serves local
communities with daily newspapers, affiliated community publications,
and a growing portfolio of digital products that inform, engage and
empower readers and advertisers. Learn more at www.journalmediagroup.com.
Additional Information and Where to Find It
This communication does not constitute a solicitation of any vote or
approval. Journal Media Group intends to file with the SEC and mail to
its shareholders a proxy statement in connection with the proposed
merger. Journal Media Group URGES INVESTORS AND SHAREHOLDERS TO READ THE
PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS WHEN THEY BECOME
AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION about
Gannett, Journal Media Group and the proposed merger. 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.
In addition, a copy of Journal Media Group’s proxy statement (when it
becomes available) may be obtained free of charge from Journal Media
Group’s website, www.journalmediagroup.com,
or by writing or calling Journal Media Group at 333 West State Street,
Milwaukee, Wisconsin 53203, (414) 224-2000, Attention: Corporate
Secretary. Investors and security holders may also read and copy any
reports, statements and other information filed by Gannett or Journal
Media Group with the SEC, at the SEC public reference room at 100 F
Street, N.E., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 or visit the SEC’s website for further information on its
public reference room.
Participants in the Merger Solicitation
Journal Media Group and its directors, executive officers and certain
other members of management and employees may be deemed to be
participants in the solicitation of proxies in respect of the proposed
merger. Information regarding Journal Media Group’s directors and
executive officers is available in Journal Media Group’s registration
statement on Form S-4 (Registration No. 333-201540). Other information
regarding the participants in the proxy solicitation and a description
of their direct and indirect interests, by security holdings or
otherwise, will be contained in the proxy statement and other relevant
materials to be filed with the SEC when they become available.
FORWARD LOOKING STATEMENTS
Certain statements in this press release may be forward looking in
nature or constitute “forward-looking statements” as defined in the
Private Securities Litigation Reform Act of 1995, including statements
regarding the proposed acquisition of Journal Media Group by Gannett,
the expected timetable for completing the acquisition and the benefits
of the acquisition. 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.
Any such statements speak only as of the date the statements were made
and are not guarantees of future performance. 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. These factors include,
among other things, economic conditions affecting the newspaper
publishing business, the uncertainty of regulatory approvals, the
ability to obtain the requisite Journal Media Group shareholder
approval, Gannett’s and Journal Media Group’s ability to satisfy the
merger agreement conditions and consummate the transaction on a timely
basis, and Gannett’s ability to successfully integrate Journal Media
Group’s operations and employees with Gannett’s existing business.
Additional information regarding risks, trends, uncertainties and other
factors that may cause actual results to differ materially from these
forward-looking statements is available in Gannett’s filings with the
U.S. Securities and Exchange Commission, including Gannett’s
registration statement on Form 10, and in Journal Media Group’s filings
with the U.S. Securities and Exchange Commission, including Journal
Media Group’s registration statement on Form S-4. Any forward-looking
statements should be evaluated in light of these important risk factors.
Gannett and Journal Media Group are not responsible for updating or
revising any forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by law.
View source version on businesswire.com: http://www.businesswire.com/news/home/20151007006588/en/
Source: Gannett Co., Inc. and Journal Media Group, Inc.
For investor inquiries, contact:
Vice President, Investor Relations
Media Group Contact:
Senior Vice President,
CFO and Treasurer
media inquiries, contact:
Vice President, Corporate Communications
Media Group Contact: