By: E&P Staff
GateHouse Media Inc. whipped out its checkbook again, announcing late Tuesday that it has agreed to buy 14 dailies, three non-dailies, a commercial printing operation, and related publications from Morris Publishing Group for $115 million.
The daily newspapers involved in the deal are the Dodge City (Kan.) Daily Globe; The Newton (Kan.) Kansan; The Morning Sun in Pittsburg, Kan.; the Hillsdale (Mich.) Daily News; The Holland (Mich.) Sentinel; the Hannibal (Mo.) Courier-Post; The Examiner in Independence, Mo.; The Grand Island (Neb.) Independent; the York (Neb.) News-Times; The Daily Ardmoreite in Oklahoma; The Shawnee (Okla.) News-Star; the Yankton (S.D.) Daily Press & Dakotan; The Oak Ridger in Tennessee; and the News Chief in Winter Haven, Fla.
Included in the non-dailies are La Estrella in Dodge City, Kan.; The Girard (Kan.) City Press; and the Vermillion (S.D.) Plain Talk. The commercial printing operation is Flashes Publishing in Michigan, which publishes The Holland Sentinel and the Flashes Shopping Guides.
Morris Publishing CEO William S. Morris IV said the sale is “in line with our strategic plan to focus on our larger markets and will enable us to pay down our existing bank debt.”
Morris Publishing owns and operates 27 daily newspapers.
“This is an excellent acquisition opportunity for GateHouse,” GateHouse CEO Mike Reed said in a statement. “These are strong local media franchises in small markets, many of which are near existing GateHouse properties and offer compelling synergy opportunities.”
Reed said he expected the papers and other assets to generate an incremental $14 million of “adjusted” EBITDA (earnings before income, taxes, depreciation, and amortization). GateHouse measures itself on the non-GAAP adjusted EBITDA financial measurement that excludes expenses such as interest expense, depreciation and amortization, income tax expense or benefit, and other non-recurring items.
Fairport, N.Y.-based GateHouse is one of the largest community newspaper chains in the nation with 86 dailies. The publicly traded company’s business model is to grow free cash flow, often with acquisitions, to fund dividends considerably higher than peer companies.