LMG is the publisher of Dagblad de Limburger and Limburgs Dagblad, regional newspaper titles in the Dutch province of Limburg with a combined daily circulation of approximately 138,000. In the year ended 31st December 2013 LMG generated a profit before tax of €4.5 million and as at 30th June 2014 its gross assets were valued in the Group’s consolidated accounts at approximately €44.4 million (including €15.0 million of cash and cash equivalents). The LMG business is owned by LMG Netherlands I B.V., which is ultimately a wholly owned subsidiary of the Group and the Sale will be effected by means of a transfer of LMG’s shares to Concentra. Loek Radix, the interim Managing Director of LMG’s subsidiary, Media Groep Limburg, will remain with the business following the Sale.
The Sale places a preliminary enterprise valuation of approximately €58 million on LMG. Following adjustments the Group will receive initial net cash proceeds of €40 million, subject to adjustments for LMG’s net cash and working capital at completion.
Completion is expected to take place on 30th September 2014.
In addition to the preliminary enterprise valuation above, the transaction also provides for:
1. an earn-out arrangement under which Mecom would receive up to €4 million in additional consideration, depending on the cumulative financial performance of LMG in the three years following completion; and
2. Mecom receiving 90 per cent of the net sale proceeds (up to a maximum of €3.4 million) of the land and buildings at two print plants which Concentra is acquiring as part of the Sale (one of which is disused and the other of which will be shut within a year of completion of the Sale) and which Concentra has agreed to sell in conjunction with Mecom following completion of the Sale
The total valuation of LMG in the Sale will therefore depend on the final amounts receivable under 1. and 2. above. The enterprise valuation, as a multiple of 2013 EBITDA, will therefore be in a range of approximately 4.0 times (assuming nothing is received in respect of 1. and 2.) to approximately 4.5 times (assuming receipt of the maximum payments envisaged in respect of 1. and 2.).
LMG has also entered into a services agreement with Mecom’s remaining Dutch subsidiary, Koninklijke Wegener NV (“Wegener”), under which Wegener will provide various services to LMG for a period of three years from completion of the Sale, for total consideration of at least €4.5 million. Concentra will make a €1.5 million advance payment on LMG’s behalf in respect of this services agreement at completion.
Norway, Oslo & UK, London & Belgium, Hasselt & The Netherlands, Limburg
- Belgian publisher De Persgroep buys Mecom for just under £200m June 30, 2014
- Mecom Group makes further Danish disposals Posted on October 23, 2013
- Mecom Group – first half results – revenues down 11% Posted on July 31, 2013
- Mecom Group sells Danish free sheets to Sjællandske Medier Posted on May 28, 2013
- Mecom Group plc – results for year ended 31st December 2012 Posted on March 21, 2013
- Mecom Group issues a pre-close trading update Posted on January 11, 2013
- Mecom to conduct a strategic review including, potentially, further disposals. Tom Toumaziz to step down as CEO Posted on July 19, 2012
- Mecom completes the sale of its media business in Norway to A-pressen AS Posted on June 28, 2012
- Mecom sells its media business in Norway to A-pressen AS Posted on December 6, 2011
- Mecom rejects approach by Dutch banks Posted on April 8, 2011
- David Montgomery forced out as chief executive of Mecom after pressure from shareholders Posted on September