By: E&P Staff The McClatchy Co. announced on Tuesday that it has completed the divesture of all 12 former Knight Ridder papers. McClatchy received a total north of $2 billion for the transactions, which represents a multiple of 11 times the last 12-month cash flows.
"This is the first milestone in the McClatchy-Knight Ridder transaction, as we have now closed the sales of all the newspapers we identified for divesture," Gary Pruitt, CEO of McClatchy, said in a statement. "We are pleased to have executed as we promised in this deal, finding good buyers, getting full prices and helping ensure committed owners for all 12 papers we divested."
Earlier this week, McClatchy also announced it has taken a 15% stake in CareerBuilder and ShopLocal.com and an 11.25% stake in Topix.net.
McClatchy will receive $310 million from Gannett and Tribune which increased its ownership in these properties. Gannett, Tribune, and the former Knight Ridder equally owned these Internet properties. When McClatchy acquired Knight Ridder, Tribune and Gannett had first right of refusal over Knight Ridder's share.
McClatchy plans to use the cash received from the divestitures and Internet properties -- approximately $1.6 billion net -- to pay down its debt. The company borrowed a little more than $3 billion to acquire Knight Ridder.
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