HM Capital Partners has acquired certain news media and associated real estate assets from Blethen Maine Newspapers Inc., a subsidiary of The Seattle Times Company. Citizens Financial Group arranged financing for the deal, for which pricing terms were not disclosed. The news assets include: The Portland Press Herald/Maine Sunday Telegram (the largest paper in the state, the Kennebec Journal, the Waterville Sentinel, the Coastal Journal and MaineToday.com.
MaineToday Media, Inc., a new company formed by Richard L. Connor, a leading newspaper executive, and HM Capital Partners LLC, a leading Dallas-based, sector-focused private equity firm, today announced that it has acquired certain news media properties in Maine and associated real estate assets from Blethen Maine Newspapers, Inc., a subsidiary of the Seattle Times Company, for an undisclosed price. In conjunction with the transaction, MaineToday Media has entered into new agreements with employee unions that give employees an ownership stake in the company.
The media assets include the Portland Press Herald/Maine Sunday Telegram (the largest paper in the state), the Kennebec Journal (which serves the capital city of Augusta), the Waterville Sentinel and the Coastal Journal, as well as MaineToday.com, an online information portal. The real estate assets include four office buildings and two print facilities.
Mr. Connor, a Maine native who has spent more than forty years in the newspaper industry, will serve as Chief Executive Officer of MaineToday Media. Mr. Connor will continue as CEO of HM Capital-owned Wilkes-Barre Publishing Company, where he has delivered stable revenue and EBITDA at the Wilkes-Barre Times Leader during one of the most challenging periods for the newspaper industry. He has served as President and Publisher of the Fort Worth Star-Telegram, where revenues doubled during his tenure.
MaineToday Media’s new partnership with the unions will further strengthen MaineToday Media’s financial position and maximize profitability. The employee ownership model extends to all employees and breaks new ground in the newspaper industry fostering a collaborative working relationship with management.
Mr. Connor said: “We are very pleased to invest in an exceptional portfolio of media and real estate assets and I am honored to have the opportunity to lead our new company. I’ve known these papers my entire life and understand their considerable value as critical information sources within their communities and throughout the state. Importantly, we have developed a business strategy through which we expect to further strengthen the papers and MaineToday.com for the benefit of our readers and advertisers. I look forward to working with the employees of MaineToday Media, who are our partners in this investment, and thank their unions for their leadership and support that helped make this transaction possible.
“It is a pleasure to partner again with HM Capital Partners, one of the world’s leading media investors, which has been extraordinarily supportive in our other shared investment in Wilkes-Barre. Many of the initiatives that we are successfully implementing in Wilkes-Barre are relevant to our new work in Maine and we look forward to sharing best practices to enhance the value of MaineToday Media,” Mr. Connor concluded.
The MaineToday Media investment builds on HM Capital’s long and successful history investing in the media sector. Since 2004, HM Capital has invested in six media platforms: including Canpages, Choice Cable TV, PDC Pages, Persona, UniTek USA and Wilkes-Barre Publishing Company.
Peter S. Brodsky, a Partner at HM Capital, said: “We are excited to expand our partnership with Richard Connor to Maine where we have acquired outstanding newspaper assets with characteristics similar to our paper in Wilkes-Barre. Reporting of the downward trends of newspapers has been skewed by the difficulties faced by fewer than 100 major market papers. In fact, there are more than 1,300 newspapers in the United States and the majority of them continue to be vital sources of local information for their communities, particularly in small and mid-sized markets. While the current economic recession has taken its toll even on these newspapers, they remain viable and profitable businesses that should thrive as the economy improves.
“The chain of newspapers we have acquired in Maine serves communities where local information is highly valued and competition is limited. Importantly, we were able to acquire these assets at a very attractive price, with conservative leverage, and believe there is significant financial and operational upside to be realized,” Mr. Brodsky concluded.
Tom Bell, President of the Portland Newspaper Guild, said: “This transaction recognizes the value of the employees involved in bringing the news to our communities. Our ownership stake will motivate workers and increase morale across the new company. We are proud of what we have accomplished here and are excited about the future.”
Financing for the transaction was arranged by Portland office of the Citizens Financial Group.
Stephen Lubelczyk, Senior Vice President and Manager of Citizens Bank’s Portland office, said, “We are very pleased to have provided financing for the purchase of these newspapers. These newspapers are vital sources of information for readers all across the state and they provide jobs and economic activity for the communities in which they are located. Rich Connor and HM Capital have provided a strong business plan for moving this new company forward and Citizens Bank is proud to be standing behind them. I especially want to thank a member of our team, Jeanne Hulit, whose skill and perseverance played a critical role in making our role in this transaction possible.”
About HM Capital Partners
Based in Dallas, HM Capital Partners LLC is a private equity firm that leverages twenty years of sector experience to acquire, change and grow strategically relevant businesses in the energy, food and media sectors. Over the past four years, HM Capital has executed 18 transactions in the media sector, representing more than $1 billion in transaction value. More information is available at www.hmcapital.com.
About Blethen Maine Newspapers, Inc.
Blethen Maine Newspapers, Inc. is a subsidiary of the Seattle Times Company. It was formed in 1998 in the acquisition of the Portland Press Herald, Maine Sunday Telegram and related news properties.