Trinity Mirror plc acquisition of Local World Holdings Limited (and on-sale)

Local WorldTrinity Mirror plc is acquiring all of the shares in UK regional news publisher Local World Holdings Limited not already owned by the Company. Trinity Mirror currently holds 20% of the shares. 38.7% of the shares are being sold by DMGT. The transaction values Local World on a debt-free cash-free basis at £220 million.

The purchase price for the 80.02 per cent. shareholding not already owned by Trinity Mirror is £154.4 million. Trinity Mirror will also assume debt, working capital and debt-like items of circa £27 million and will incur some £6 million of transaction costs at completion which together with the equity consideration represents total consideration of £187.4 million.

Commenting on the Acquisition, Simon Fox, Chief Executive, Trinity Mirror plc, 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.”

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 Limited and Iliffe News & Media Limited. Local World’s print portfolio comprises 83 print publications: 16 daily print titles, 2 Metro franchises, 36 paid weekly titles and 29 free weekly titles. Local World generated revenue and Adjusted Operating Profit of £221 million and £39 million in 2014.

On completion, with the exception of Simon Fox and Vijay Vaghela, all Executive and Non Executive directors will resign as directors of Local World. David Montgomery, Group CEO, Local World and Lisa Gordon, Corporate Development Director, will also leave the business shortly after completion. Rachel Addison, the Chief Operating Officer of Local World, will be promoted to the role of Managing Director, Local World, reporting to Simon Fox.

Proposed On-Sale

Trinity Mirror has signed Heads of Terms with Edward Richard Iliffe to sell the businesses and assets of certain Local World newspaper titles located around Cambridge and Hertfordshire for a cash consideration of £15.8 million. These titles contributed £3.1 million to the Adjusted EBITDA of Local World in 2014. In the event that the Proposed On-Sale is not completed, Trinity Mirror has agreed, in certain circumstances, to pay, or procure the payment of, a break fee of £2 million to Iliffe Print Cambridge Limited (an Iliffe family company). The break fee will not be payable if the Acquisition is not completed.

UK, London

Related articles:

Iliffe

Trinity Mirror

DMGT