Stephens Media newspapers have been sold to the New Media Investment group, a publicly traded company based in New York for $102.5 million in cash.
We’ve heard for weeks of potential buyers visiting Arkansas properties, the largest being the Southwest Times Record in Fort Smith. The Pine Bluff Commercial and other weekly papers are part of the deal. The big prize in the package is the Las Vegas daily newspaper, once one of the country’s most profitable, but wracked in recent years in part by an economic downturn in the city.
Sean Beherec at Arkansas Business has more background. New Media, a new outfit, earlier bought Halifax Media, partially owned by Stephens. The newspapers sold today are what remain of the Donrey Media empire begun in Fort Smith by Donald W. Reynolds and sold by his estate in 1993 to the Stephens family — now Warren Stephens and his cousins Witt Stephens Jr. and Elizabeth Stephens Campbell — for about $800 million. They’ve parceled off billboard and broadcast and other newspapers over the years, as well as operating them profitably for a number of years before the Internet began taking a major toll on print. The gossip always was that the Stephenses paid off the purchase price with profits in the early years and perhaps that’s true: Warren Stephens, CEO of Stephens Inc., has told Sean Beherec in his updated story that the investment was one of the best they’d ever made and an outstanding return on investment. (Yes, but that Las Vegas newspaper was once worth a LOT more than it is worth today. Timing is everything)
The news release follows. Stephens Media says it will have no additional comment. One key question unanswered is whether the Stephens investment in a partnership with Walter Hussman and the Arkansas Democrat-Gazette in what is now a regional edition of the Arkansas Democrat-Gazette is a part of the property that changed hands. I’m awaiting an answer on that and whether it could mean in time sole WEHCO media ownership of that regional newspaper. UPDATE: Beherec’s update says that Stephens-Hussman partnership remains in place in NWA. Its contours remain unknown. By one account, it is a year-to-year contract. Time will tell. Friday morning correction: This item has been edited to better reflect reporting that the joint deal is apart from the purchase.
New Media Investment Group Inc. (“New Media” or the “Company”, NYSE:NEWM) announced today that it has reached an agreement to purchase substantially all of the assets of Stephens Media, LLC (“Stephens Media”) for $102.5 million in cash, subject to working capital adjustments. New Media intends to fund the acquisition with cash on the balance sheet and available capacity under its credit facility. Stephens Media is a leading newspaper publisher operating eight daily newspapers, over 65 weekly and niche publications, and more than 50 websites serving communities throughout the United States. The assets have a combined average daily circulation of approximately 221,000 and 244,000 on Sunday.
Michael E. Reed, New Media’s President and CEO commented, “We are pleased to announce the proposed transaction to acquire Stephens Media. The portfolio is anchored by an attractive set of print publications with a strong community focus, solid readership base, and stable advertisers with limited customer concentration. These award-winning, daily newspapers are the trusted source of local news in their communities providing journalistic excellence for more than 100 years. We are very excited to welcome Stephens Media into our growing New Media family, and look forward to introducing new digital initiatives, such as Propel and BestRide into their markets, while simultaneously continuing their long standing tradition of providing premier content to the communities they serve.
“In our first year as a publicly traded company, New Media has entered into agreements to acquire approximately $457 million of local media assets. We are very pleased that each of these acquisitions has met both our financial and operational criteria. As we begin 2015, we remain focused on operating the Company to drive strong revenue trends while integrating newly acquired assets and assessing future acquisition opportunities. Looking forward, we feel very optimistic about our ability to continue to create tremendous shareholder value.”
“I am extremely pleased for all of our employees,” said Ed Moss, President and CEO of Stephens Media. “New Media is well positioned to build off of our company’s successes and lead the organization to new heights with their strong portfolio of print and digital products and services. We have dedicated and talented employees that will prove to be great assets to the outstanding organization that New Media is building.”
New Media anticipates the deal will close in the first quarter of 2015 subject to customary closing conditions; however, there can be no assurance as to the timing or the occurrence of the closing.
Stephens Inc. served as exclusive financial advisor to Stephens Media.