The agreement, which values the newly created Local World Ltd. at £100 million including debt, comes almost seven years after Daily Mail and General Trust abandoned an attempt to sell Northcliff after failing to garner bids around the £1 billion level it had sought. Since then Northcliffe has been cutting costs and fighting to reverse a slump in advertising revenue as consumers shun local papers in favor of digital media.
Co-owners in the new regional news company, Local World Ltd., include Trinity Mirror plc, which is investing £14.2 million for a 20% stake; Iliffe parent Yattendon Group, with a 21.3% stake; Artefact Group, an investment vehicle of Michael Ashcroft, a peer and former deputy chairman of the Conservative Party; and Odey Asset Management.
David Montgomery, former CEO of Trinity Mirror predecessor Mirror Group plc and the founder of struggling publisher Mecom plc , will serve as chairman of Local World, with Northcliffe CEO Steve Auckland and CFO Rachel Addison transferring over to those same roles.
Local World's titles will include 16 daily papers, 36 paid weekly titles, 40 free weekly papers as well as various niche products, magazines and local portal websites.
On a pro forma basis, Local World would have reported revenue of £273 million and operating profit of £21 million for the twelve months ended Sept. 30 , and would have had gross assets of £38 million at that date. It will employ more than 2,800.
As well as the influential Daily Mail tabloid, Dail Mail and General Trust's other businesses include Euromoney Institutional Investor plc and Risk Management Solutions, which produces data used by insurers.
In September, Daily Mail and General Trust sold conferences business Evanta to Leeds Equity Partners for about £58 million and shed its remaining 50% in DMG Radio Australia (DMGRA) to Lachlan Murdoch's Illyria Pty Ltd. for A$100 million ($103.5 million) in cash plus a deferred component equating to half the business' final dividend.
Daily Mail and General Trust's shares were little changed at 469 pence by late morning in London, giving the company a market value of £1.8 billion. Its adviser on the Northcliffe Media sale was Lazard.
Corrado Manuali joined Withers Bergman LLP as head of its Italian desk in the U.S. For other updates launch today's Movers & shakers slideshow.
The No. 1 and No. 2 U.S. players, Sysco and U.S. Foods, plan to merge in an $8.2 billion deal, but FTC concerns loom large. More video