MECOM GROUP disposes of LMG

mecomMecom Group plc is selling its operating subsidiary in Limburg, LMG Netherlands II B.V., to Concentra Media Nederland B.V., a subsidiary of Concentra NV.

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

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Belgian publisher De Persgroep buys Mecom for just under £200m

persgroep-logo-belgieBelgian publisher De Persgroep has agreed to buy Mecom for just under £200 million. Each Mecom Shareholder will be entitled to receive 155 pence in cash for each Mecom Share they hold, which values the entire issued and to be issued share capital of Mecom, on a fully diluted basis, at approximately £196 million.

mecomMecom, a company incorporated under the laws of England, is a European media group, with leading positions in the news and information publishing business in the Netherlands and Denmark. Mecom’s Dutch division comprises the Koninklijke Wegener (Wegener) and Media Groep Limburg (Limburg) businesses. Wegener is the largest publisher of regional daily newspapers and free door-to-door newspapers in the Netherlands. Limburg is the leading regional newspaper business in the Dutch province of Limburg. The Dutch division has a total daily readership of approximately 2.5 million and publishes content in print and in online, mobile and e-paper form. The Danish division publishes two daily national titles and one weekly national title as well as seven daily regional titles and 17 free weekly titles. In total, the Danish division has a daily readership of approximately 500,000. Mecom also operates national and local radio stations, with total listeners of approximately 1 million.

De Persgroep, a company incorporated under the laws of Belgium, is a major operator in the Belgian and Dutch media markets. De Persgroep’s activities consist of news media, magazines, television, radio and online services.

The Transaction will be funded by a combination of existing cash resources and a new debt facility provided by BNP Paribas Fortis S.A./N.V.

Commenting on the Transaction, Christian Van Thillo, Chief Executive Officer of De Persgroep, said: “This announcement is consistent with our successful strategy in our publishing activities and with our belief that consolidation in our industry is necessary in order to transform our publications into multimedia brands in a profitable way. Mecom is a leading publishing group with strong and respected news brands in the Netherlands and Denmark.

It further underscores our ongoing commitment to develop innovative multi-media news brands that offer readers a richer experience through printed and digital newspapers, news sites and apps. In addition to operational breadth and depth, the combined business will be better positioned for transformation towards a media group that is leading in print and online.”

Norway, Oslo & UK, London & Belgium, Kobbegem

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Mecom Group makes further Danish disposals

mecomMecom Group‘s Danish subsidiary, Berlingske Media A/S, has agreed the sale to North Media A/S Group of its media centre in Frederiksberg publishing six free weeklies and its 60 per cent shareholding in Lokalaviserne Østerbro og Amager (“LØA”) publishing two free weeklies.

The total enterprise value of the Sale is DKK65 million (€8.7 million). The consideration is payable in cash at completion and the Group expects the reduction in net debt resulting from the sale to be approximately €8.3 million. The Sale is expected to complete on 1st November 2013.

The principle activity of both LØA and the Frederiksberg media centre is the publishing of various free weekly newspaper titles in Copenhagen. The combined profit before tax of the disposed businesses in 2012, including the 40 per cent minority share of LØA’s consolidated pre-tax earnings, was DKK19 million (€2.6 million), before allocations of central overhead. Berlingske Media A/S will continue to provide printing services to both the Frederiksberg media centre and LØA following completion of the Sale.

The sale will be effected by way of a transfer of the trade and assets of the Frederiksberg media centre and a sale of the Group’s shares in LØA and will result in the deconsolidation of approximately €8.4 million of gross assets from the Group’s balance sheet. Flemming Hansen will retain his position as Chief Executive Officer of LØA following completion of the Sale.

The proceeds of the Sale will be used to pay down outstanding bank borrowings.

Norway, Oslo, UK, London & Denmark, Copenhagen

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