New Media sells the Las Vegas Review-Journal for $140 mln

New Media Investment Group Inc has sold the Las Vegas Review-Journal and related publications to News + Media Capital Group LLC for $140 million. News Media has also made two additional acquisitions: the business information division of Dolan, a news provider for the legal, financial, real estate and government affairs sectors and an unidentified “dominant, local daily newspaper.” The total price of these latter two transactions are $46.5 million. Houlihan Lokey provided financial advice to Dolan on the deal.


NEW YORK–(BUSINESS WIRE)–New Media Investment Group Inc. (“New Media” or the “Company”, NYSE:NEWM) today announced the sale of DB Nevada Holdings, Inc., publisher of the Las Vegas Review-Journal (“the Review-Journal”) and concurrently announced the agreement to acquire two local media assets in separate transactions.

Completed the sale of the Review-Journal and related publications for $140 million, or 7.0x LTM pro-forma As Adjusted EBITDA

Announced an agreement to purchase the Business Information Division of Dolan LLC (“Dolan” or “the Dolan assets”)

Reached an agreement to purchase substantially all of the publishing operations of a dominant, local daily newspaper

Pro-forma for all three transactions, New Media’s LTM As Adjusted EBITDA and free cash flow remains largely the same as reported in Q3 2015 at approximately $185 million and $144 million, respectively

The three transactions together will result in an increase of over $90 million of cash to the balance sheet
Over the next 12 months, New Media expects to have deployable capital which could add approximately $1.65 of incremental free cash flow per share, without raising additional equity, if invested at multiples generally consistent with our prior acquisitions(1)

“We are thrilled to announce these three transactions and believe they demonstrate our continued commitment and ability to generate substantial returns for our shareholders,” said Michael Reed, New Media’s President and CEO. “Although we are a net acquirer of local media businesses, we will opportunistically pursue transactions that are in the best interest of New Media’s shareholders.

“To date, New Media has announced 12 acquisitions for over $635 million, and more importantly, has remained a disciplined buyer of local media assets. Our portfolio, including the two announced purchases, has an average multiple of 3.9x the seller’s LTM As Adjusted EBITDA. Given our increased liquidity and our established track record of sourcing, valuing, integrating, and operating local media assets, we believe New Media is well positioned to continue to execute on all aspects of our strategy.”

Completed Sale of the Review-Journal and related publications for $140 million
New Media completed the sale of the Review-Journal and related publications to News + Media Capital Group LLC for $140 million, or 7.0x LTM pro-forma As Adjusted EBITDA. The sale, which was completed on December 10, 2015, will result in an estimated 69% gain on the transaction(2).

Michael Reed commented, “The Review-Journal continues to be the preeminent newspaper in Las Vegas providing in-depth coverage of community news. Over the past nine months, it has been a privilege working with the Review-Journal’s employees, and we know their award-winning journalistic reputation will continue under the new ownership.

“Although New Media was not actively looking to sell the newspaper, the decision was in the best interest of our shareholders. Looking ahead, we continue to believe we can execute on our acquisition strategy, acquiring local media assets at 3.5x to 4.5x the seller’s LTM As Adjusted EBITDA, despite the premium multiple being paid for a prized asset such as the Review-Journal.”

“We are delighted to have acquired the Review-Journal,” said Michael Schroeder of News + Media Capital Group LLC. “The Review-Journal is the leading newspaper in Las Vegas and Nevada, and we look forward to working with New Media to continue to grow this great publication. We believe good journalism is good business.”

New Media has been engaged by News + Media Capital Group LLC as the manager of the newspaper assets; however, terms of the management agreement have not been disclosed.

Announced an agreement to acquire the Business Information Division of Dolan LLC
Dolan, comprised of 39 print and online publications, is a leading provider of industry-specific news for the legal, financial, real estate, and government affairs sectors in the 17 markets it serves across the U.S. In addition to providing subscribers with content relevant to their daily professional activities, Dolan also develops, organizes, and produces events centered on awards and education seminars. Dolan’s audience of over 46,000 paid subscribers includes attorneys, judges, property owners, building contractors, and other business professionals.

“We are pleased to announce the agreement to acquire the Dolan assets and see a tremendous opportunity to leverage its publications and subscriber base across New Media’s footprint,” said Michael Reed. “In addition to the valuable content Dolan provides to its readership base, we believe their subscribers, which are predominately service oriented business owners, are the ideal customer for our fast-growing digital services business, Propel Marketing.”

Houlihan Lokey served as exclusive financial advisor to Dolan.

New Media anticipates both Dolan and the other local daily newspaper acquisition will close at the end of 2015 or in early 2016, subject to customary closing conditions; however, there can be no assurance as to the timing or the occurrence of either closing.

1)The incremental free cash flow per share included herein is a hypothetical value used for illustrative purposes only and derived from metrics in line with previous acquisitions.

2)Based on internal estimates and management’s current expectations.

About New Media Investment Group Inc.
New Media is focused primarily on investing in a high quality, diversified portfolio of local media assets, and on growing existing advertising and digital marketing businesses. The Company is one of the largest publishers of locally based print and online media in the United States as measured by our 125 daily publications. As of September 27, 2015, the Company operates in over 490 markets across 32 states. New Media’s portfolio of products, as of September 27, 2015, include over 575 community publications and over 490 related websites, serve more than 215,000 business advertising accounts and reach over 22 million people on a weekly basis.

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