Park Communications Sold For $711 Million p. 9

By: Mark Fitzgerald

Real estate developer and stock broker team up to buy
newspaper and broadcast chain; total purchase price
represents a multiple of about 22 times earnings sp.

PARK COMMUNICATIONS INC., the sprawling family-controlled newspaper and broadcasting chain, said it reached an agreement to be sold to two investors for $711.4 million.
Neither of the investors, Donald Tomlin and Gary Knapp, have experience managing a media company.
Tomlin was described by a spokesman for the two as a native South Carolinian who is active in real estate development in the South.
Knapp operates a stock brokerage in Lexington, Ky., the spokesman said.
A Park news release said the two have indicated they intend to retain Park's current management and employees.
The total purchase price of about $30.50 per share represents a multiple of about 22 times earnings, a multiple rarely seen since the heyday of newspaper prices in the mid-1980s.
For instance, when the company was put on the auction block last March, newspaper analyst John Morton of Lynch, Jones & Ryan in Washington valued the chain at $400 million to $450 million (E&P, April 9, p. 9)
One factor holding down the price was thought to be the fact that the vast majority of Park's properties are in small markets.
The Wall Street Journal, citing unnamed sources, reported that the winning bid was about $75 million more than the next highest offer.
Headquartered in Ithaca, N.Y., Park publishes 106 newspapers in 21 states, among them the Effingham (Ill.) Daily News, Coldwater (Mich.) Daily Reporter and Union Sun and Journal in Rockport, N.Y.
Park also owned 22 radio stations and nine television stations. Federal Communications Commission clearances will be needed on those sales, making a closing date impossible to set now.
Park Communications was put up for sale five months after the death of founder Roy Park Sr. last October at age 83. Park's board of directors voted March 25 to put the chain up for sale after Roy Park's estate decided to sell its 89.6% stake.
Much of the purchase price will come from a $573.4 million loan to Donald Tomlin from the the Retirement Systems of Alabama. Retirement Systems, which funds pensions for teachers and other government employees in Alabama, has backed other projects by Tomlin in the past. The loan will be backed by Park assets, the fund said.
Park Foundation, a charitable foundation established by Roy Park, will be the biggest beneficiary of the sale.
Under the terms of Roy Park's will, 51% of his stock holdings went to the foundation, with the rest going to family members, Ithaca College in New York, North Carolina State University, his church and the local United Way.
Investment banker Goldman, Sachs & Co. "represented Park in connection with carrying out the decision of the board of directors to seek the sale of the company," Park Communications said in a statement.
About 10% of Park Communication's approximately 20 million outstanding shares trade on the NASDAQ National Market System under the symbol PARC. The stock, which had been trading at around $22.50 in March when Park announced it was up for sale, closed at $28.50 the day the sale was announced.