New Media Investment Group Inc. is to acquire The Providence Journal, a daily newspaper serving the metropolitan area of Providence, Rhode Island, for $46.0 million in cash from A. H. Belo Corporation. Under the deal, which includes “substantially all of the assets” of The Journal, New Media will acquire the newspaper’s production facility on Kinsley Avenue but not The Journal’s headquarters at 75 Fountain St., nor the downtown parking facilities and other property A.H. Belo owns.
The deal is expected to close in the third quarter of 2014.
It was independently owned until A.H. Belo Corporation bought The Providence Journal Company in 1996 for $1.5 billion, when both corporations owned newspaper and television operations.
Later, Belo split into two companies, one called Belo Corporation, which operated the television stations, and the other, A.H. Belo Corporation, which operates the newspaper organizations.
A.H. Belo announced in December that it had hired a consultant to “explore a potential sale” of the news organization so it could concentrate on its businesses in Texas.
Michael E. Reed, New Media’s President and CEO commented, “We are very excited to announce the proposed transaction with A. H. Belo. The Providence Journal is one of the most established and prominent newspapers in the United States and is the preeminent provider of local content to the greater Providence marketplace. In addition, its high quality editorial standards have resulted in four Pulitzer Prizes for the newspaper. We are very excited to welcome the paper, its employees and the community into the growing New Media family. We deeply admire the great work that has been done in Providence under the stewardship of A. H. Belo, and look forward to continuing that tradition.
“We are also enthusiastic about the opportunity to expand our digital services business, Propel, with this acquisition. There are approximately 28,000 small and medium sized businesses in the Providence market and the newspaper has a strong, in-market local sales force of approximately 40 representatives. Further, with only about 25% of revenue coming from local print advertising, we believe this acquisition further evolves New Media’s revenue mix towards stable to growing revenue categories.
“Over the past 10 months, New Media has entered into agreements to acquire approximately $151 million of local media assets at an average purchase price to EBITDA multiple of 3.3x. We are very excited about our progress year to date and, as we look forward to the second half of the year, remain focused on executing on our strategy which we believe will drive substantial shareholder returns.”
USA, New York, NY & Providence, RI