Post & Mail publisher invests £154m to expand its regional newspaper portfolio
BIRMINGHAM Post & Mail publisher Trinity Mirror is set to considerably expand its portfolio of regional newspaper titles with the acquisition of the entire share capital of Local World Holdings in a deal worth more than £150m.
The portfolio, acquired from Daily Mail and General Trust, includes a string of well known daily and weekly titles.
The acquisition values Local World on a debt-free cash-free basis at £220m. Trinity Mirror already owned just under 20% of the business and the purchase price for the outstanding 80.02% of the shareholding is £154.4m.
Trinity Mirror will also assume debt, working capital and debt-like items of circa £27m and will incur some £6m of transaction costs at completion which together with the equity consideration represents total consideration of £187.4m.
The publisher said the acquisition would transform the business into the UK’s largest regional news publisher and create a stronger and more resilient organisation enabling the group to accelerate its strategic transformation.
Importantly, it will also further enhance Trinity Mirror’s digital reach. The enlarged group’s digital portfolio will comprise a network of publishing websites delivering 120 million monthly unique browsers and 790 million monthly page views. The move will also deliver cost synergies of between £10m to £12m in the second full year of ownership.
Before then, the board said it expected the acquisition to be earnings enhancing in the first full year of ownership.
Commenting on the acquisition, Simon Fox, Chief Executive, Trinity Mirror, said: “This is a good day for local media. Local World is a business we know and respect and by combining it with Trinity Mirror we will create an organisation of scale, with the talent and financial capacity to invest and adapt to the rapidly changing media landscape. It is a vote of confidence in local press and its future.”
David Montgomery, Group CEO, Local World, added: “Local World was founded three years ago with a clear vision to reinvigorate regional media with an unrelenting focus on our content, audience and advertisers. I am proud of what we have achieved. Local World is full of energy and talent and Trinity Mirror is acquiring a vibrant business with a strong future. I want to take this opportunity to thank everyone who has made Local World the success it is today.”
The acquisition will be funded through a combination of cash and shares issued to the sellers. Trinity Mirror will fund the total consideration, including related transaction costs by utilising £67.3m of existing cash resources, entering into a new £80m five-year amortising debt facility, issuing £5.3m of new shares and placing 22,398,041 new ordinary shares with a view to raising £34.8m.
Local World is one of the largest regional news publishers in the UK and was established at the end of 2012 through the acquisition of the regional publishing assets of Northcliffe Media and Iliffe News & Media.
Its print portfolio comprises 83 print publications: 16 daily print titles – including the Burton Mail, Stoke Sentinel, Derby Telegraph, Nottingham Post and Leicester Mercury, two Metro franchises, 36 paid weekly titles – including the Black Country Bugle, Staffordshire Newsletter and Tamworth Herald series, and 29 free weekly titles – including the Lichfield Mercury series, Sutton Coldfield Observer and Walsall Advertiser.
The deal is expected to complete next month.
