Gannett Co., Inc. (NYSE: GCI) (“Gannett”) and Journal Media Group, Inc. (NYSE: JMG) (“JMG”) have announced 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.
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 credit facility.
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 organisations 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,” Dickey concluded.
“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 family.”
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 realise 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 utilise its printing and distribution assets.