Platinum Equity is fast becoming the year’s most intriguing private equity firm. Not only for the rollicking Delphi saga, but also for its counterintuitive interest in the beleaguered newspaper sector.
Los Angeles-based Platinum did its first newspaper deal just a few months ago, buying the San Diego Union-Tribune for a reported price of less than $50 million. I kind of thought it was a one-off sort of transaction, at least partially prompted by SoCal solidarity. But now that deal seems to be part of a broader strategy, judging by reports that Platinum has submitted a bid for The Boston Globe ($35m plus $59m in assumed pension liabilities).
I’ve got no idea why any private equity firm would want a broader newspaper strategy. After all, look at what happened to Avista in Minneapolis, or the fact that Bain Capital’s Steve Pagliuca is bidding on the Globe via a nonprofit strategy (he apparently views it as a civic rescue, but not something suitable for institutional PE).
But that’s why Platinum is on my mind. Does its Globe bid mean that the firm has early indications that its San Diego deal is working? Or is it the opposite, in that San Diego can only work with some sort of economy of scale (i.e., creation of a national newspaper chain)? And is there any evidence that this generalist firm can reinvent the press? Again, intriguing…