Newspaper M&A Activity Was Strong in 2002

By: The number of global newspaper merger & acquisition deals declined 34.6% in 2002 from the previous year, according to the Jordan, Edmiston Group Inc., investment bankers in New York. But the transactions' value was much higher in 2002.

There were 53 deals valued at $2.5 billion in 2002, compared with 81 deals in 2001 valued at $770 million.

"Despite the difficult economic environment in 2002, the newspaper M&A environment continues to be healthy, with transaction multiples remaining at historically high levels, in the range of three to five times revenue and 12 to 14 times EBITDA (earnings before interest, taxes, depreciation, and amortization)," the Jordan, Edmiston 2002 M&A report said. The group's analysts cited several trends contributing to the robust M&A market for newspapers: solid fundamentals thanks to decreased payroll and newsprint costs, geographic consolidation, and a scarce supply of available properties.

Overall global media M&A activity, including newspapers, magazines, books, directories, trade shows, and other sectors, was up 12.7% to $21.2 billion. However, the number of deals declined 19.8% to 329 transactions. The U.S. accounted for 80% of worldwide media transactions.