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Below some major news and noteworthy tidbits from the marketing and media world. Lots of news on the M&A front this week.

Gannett buys Journal Media

gannettGannett Co. the largest newspaper company in the U.S. is buying Journal Media Group, the Wall Street Journal reports The deal is described as a sign of “a long-awaited round of consolidation” in the newspaper industry. The Journal Media owns the Milwaukee Journal Sentinel, the Memphis Commercial Appeal, the Knoxville News Sentinel and the Naples Daily News as well as dozens of community papers throughout the Midwest and South. Gannett recently split into two publicly traded companies in a push to separate slower-growing publishing assets from TV and digital properties.
Gannett, with more than 90 daily newspapers, is the nation’s largest newspaper publisher, measured by daily circulation. In addition to USA Today, it owns the Arizona Republic, Indianapolis Star, Cincinnati Enquirer and The Tennessean in Nashville.

Hot Millennials: Axel Springer also Buys Stake in Thrillist

The big news was Axel Springer’s purchase of a majority stake in Business Insider. But the German publisher’s pursuit of Millennials does not stop there. Springer also announced last week that it took a stake minority stake in Thrillist, part of a larger $54 million round of funding. Thrillist characterizes itself as a “leading men’s digital lifestyle brand” with a series of sites dedicated to advising millennial guys on everything from where to take their dates in Denver or Honolulu to where to find the best pizza in Berlin.

Meredith says the deal with Media General is not dead, yet

Meredith

Everything was about to happen with the Meredith acquisition by Media General. But after Nextstar Broadcasting announced a bid to buy Media General for US$ 4.1 billion, the previously announced acquisition of a 65% stake of major magazine publisher Meredith Corp by Media General is becoming increasingly unlikely. The Nexstar bid, delivered to Media General as a letter, describes the Meredith deal as “ill-conceived” and contends that a Nexstar/Media General merger would offer even bigger scale—162 stations in 99 markets versus 82 stations in 54 markets. Nexstar is positioning the deal as a “pure-play” broadcast deal, without any ownership of publishing assets. However, according to Adweek, Meredith told employees in a memo that both Meredith’s and Media General’s boards of directors have approved and signed a merger agreement and it remains “confident in the strategic rationale behind the merger and the shareholder value it will create.” The memo went on to say Meredith is working on closing the deal “in a timely fashion.’” Media General says it is still looking at the deal proposed by Nexstar but added in a Monday press release, “The Board of Directors of Media General continues to recommend the proposed transaction with Meredith.” Media General also issued a statement acknowledging it received the unsolicited proposal from Nexstar.

Ferrer Faass & Co acquires assets of Casiano

Hispanic MagazinePuerto Rican publisher Casiano Communications is being taken over by Ferrer Faass & Co, a Corporate Advisory Firm and Private Equity Fund Manager based in San Juan, PR. The Bankruptcy Court announced that Ferrer Faass&Co’s offer of a total of US$ 15 million beat a competing offer by New York investment firm Encanto Group. Casiano publishes several magazines including Caribbean Business, Vivir al Maximo and Imagen. Ferrer Faass & Co, announced that it will continue publishing the magazines. Approximately 300 employees work in Casiano.

 

Roman Catholic Diocese in OC bets on Spanish-language Newspaper

The Roman Catholic Diocese of Orange county is extending its multimedia outreach within Orange County by launching a Spanish-language counterpart to its weekly Orange County Catholic newspaper. Orange County Catholic En Español debuted as a bi-weekly Spanish-language newspaper publishing every other Sunday, on Sept. 20, with a digital replica available through occatholic.com. range County Catholic En Español will have a 25,000 bi-weekly distribution throughout Orange County, and specifically within Hispanic-dominant communities such as Santa Ana and Anaheim. It will be available at more than 330 retail and news rack locations within high-traffic retail locations, which includes distribution alongside Freedom’s weekly Spanish-language newspaper, Excélsior. Combined, the English- and Spanish-language newspapers will reach an audience of more than 100,000. Both English- and Spanish-language editions are published in partnership with Freedom Communications, which publishes Spanish-language weeklies Excélsior and La Prensa in the Orange County market. “As the Catholic population continues to grow, our diocese must also expand the ways we connect and communicate with the faithful in our community,” said Most Reverend Kevin W. Vann, Bishop of Orange. “Orange County Catholic En Español is an important vehicle to bring inspirational stories of faith and news through a Catholic lens to our Spanish-speaking brothers and sisters. It is our playful hope that the content included within this newspaper will grow understanding and deepen the faith of our community.” Orange County Catholic’s English-language circulation has grown from 47,000 in 2013 to more than 80,000, and is now the largest Catholic weekly newspaper in the nation.

What: Media General, Inc. and Meredith Corporation have announced a merger agreement under which Media General will acquire Meredith in a cash and stock transaction currently valued at approximately US$2.4 billion. Media General will also take on Meredith’s net debt of US $772m, giving the deal an enterprise value of $3.1bn.
Why it matters: Media General will create a new multiplatform and diversified media company to be known as Meredith Media General following the agreement. Meredith, the second largest magazine publisher in the U.S,  has been seen as a potential buyer of Time Inc’s print assets, but now, analysts claim, Meredith Media General could put its large stable of magazines media assets up for sale.

logomg-logoMedia General, Inc. and Meredith Corporation have announced a definitive merger agreement under which Media General will acquire all of the outstanding common stock of Meredith in a cash and stock transaction currently valued at approximately US$2.4 billion to create a powerful new multiplatform and diversified media company to be known as Meredith Media General.

Until 2012 Media General was a major newspaper publisher. That year it sold most of its newspaper assets and to focus on its broadcast assets, currently 88 stations across 55 markets, and expand them through acquisition. Meredith Corporation, on its part, historically has been the largest magazine publisher targeting women in the U.S..

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J. Stewart Bryan III

Upon the closing, the Board of Directors will consist of 12 directors, eight appointed by Media General and four appointed by Meredith. J. Stewart Bryan III, current Media General Chairman, will be Chairman of Meredith Media General.

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Stephen M. Lacy

Stephen M. Lacy will lead Meredith Media General as Chief Executive Officer and President.

 

 

Joseph H. Ceryanec
Joseph H. Ceryanec

Joseph H. Ceryanec will be the Chief Financial Officer. The balance of Meredith Media General’s senior management team will be a combination of the two existing executive teams. The company will maintain corporate and executive offices in Des Moines and Richmond.  Meredith Media General will be incorporated in Virginia.

Meredith Media General will be well positioned to grow in a rapidly consolidating and evolving media industry.  It will use its strong financial profile to deliver substantial value to shareholders, customers and employees. This financial profile includes:

• Pro-forma annual revenues of US$3 billion and EBITDA of over US$900 million;

• More than US$800 million of total synergies expected within the first two years with US$60 million of run-rate synergies expected in the first 12 months of operations post-closing;

• Significant free cash flow that can be used to rapidly pay-down debt; forma adjusted EBITDA, as per Media General’s credit agreement;

• Expected pro forma net leverage at closing of less than 5.5x, based on 2014/2015 average pro

• Consistent with Meredith’s long history of Total Shareholder Return, a strong commitment to returning cash to shareholders via dividends over the longer term; and

• The opportunity to continue growing and expanding its portfolio on the national and local level as the media industry consolidates.

Media General Chairman J. Stewart Bryan III said, “This merger creates greater opportunities for profitable growth than either company could achieve on its own. Importantly, shareholders of both companies will benefit from the upside potential of a diversified and strategically well-positioned media company with a strong financial profile and the ability to generate significant free cash flow.”

Meredith CEO Steve Lacy said, “We are excited about the opportunity to create a powerful new multiplatform and diversified media company with significant operations on the local and national levels. This merger will create a strong and efficient company positioned to realize the significant earnings and cash flow potential of local broadcasting; leverage the unparalleled reach and rich content-creation capabilities of Meredith’s national brands; and capture the rapidly developing growth potential of the digital media space. It also positions Meredith Media General to deliver enhanced shareholder value and participate in future industry consolidation.”

Meredith Media General will boast a portfolio of best-in-class media platforms including:

Third-largest local television station owner, initially with 88 television stations across 54 markets that reach 30 percent – or approximately 34 million – U.S. TV households. It will include 40 Big Four network-affiliated TV stations located in the Top 75 DMAs. Stations in six markets will be swapped or otherwise divested in order to address regulatory considerations. These markets are Portland, OR; Nashville, TN; Hartford-New Haven, CT; Greenville-Spartanburg, SC-Asheville, NC; Mobile, AL-Pensacola, FL; and Springfield, MA. To the extent that the company is able to successfully execute swaps, as opposed to outright sales, it will further enhance the combined company’s size and scale. Moelis & Company has been retained to manage the process of divesting stations in overlapping markets to facilitate regulatory approval.

• Leading multiplatform national media brands with a top female reach of 100 million unduplicated American women and over 60 percent of U.S. Millennial women. These category leading brands include Better Homes and Gardens, Allrecipes, Parents and Shape.

• A powerful digital platform reaching over 200 million monthly unique visitors via a combination of leading national and local consumer sites and business-to-business digital capabilities in key growth sectors such as content, mobile, social, video, and native advertising. Digital revenues are expected to exceed US$500 million in the first full year of operations post closing.

• Diverse revenue streams including a Top 3 global brand licensing program and leading marketing services agencies.

 

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