In total, 84 daily newspapers were sold last year in 25 transactions worth $642.83 million, according to statistics compiled by Dirks, Van Essen & Murray, the nation’s leading newspaper merger and acquisition firm. The increased activity shows renewed optimism about the industry, as new buyers who entered the market in 2011 continued to build in 2012. Looking forward in 2013, the firm expects the deal flow to remain strong.
“Although the environment for financing transactions is still challenging, many of the buyers entering the marketplace are bringing financial strength that enhances their ability to close,” said Phil Murray, executive vice president of Dirks, Van Essen & Murray.
- Several prominent buyers who started to acquire newspapers in late 2011, including Warren Stephens, Warren Buffett and Phil Anschutz, remained acquisition-minded in 2012 and contributed to the increased deal volume.
- Versa Capital Management, which made its first newspaper purchase in 2011, built a new company called Civitas Media in 2012 with 35 dailies that cracked the top 10 in terms of daily newspapers owned.
- Most of the sellers in 2012 were group owners. Just 20% of the daily transactions involved independently owned newspapers.
- The number of dailies changing hands and the number of transactions in 2012 were up from 2011, when 71 dailies sold in just 11 separate transactions, according to DV&M. Dollar volume was slightly higher in 2011 at $788.75 million. Both years were the most active since the record-setting year of 2007, just prior to the national recession, the firm said.
“Newspaper publishers are starting to drive revenue from non-traditional sources,” Murray said. “This is giving buyers renewed confidence about the future of the industry.”
The two largest transactions of 2012 involved the breakups of two venerable newspaper companies. A unit of Buffett’s Berkshire Hathaway bought most of the newspapers owned by Richmond, Va.-based Media General. Media General’s Tampa (FL) Tribune and related publications were sold separately to a private equity group.
In addition, Freedom Communications sold all of its newspapers in a series of transactions. An investor group led by Aaron Kushner bought the newspapers located in the west, including the Orange County Register, and retained the Freedom Communications name.
Previously, Freedom had sold its newspapers in Florida and North Carolina to Stephens’ Halifax Media Group, its Texas newspapers to a new company led by Jeremy Halbreich and its Midwest newspapers to Versa. Versa formed Civitas Media after taking over Heartland Publications later in the year.
The field of buyers in 2012 also consisted of a number of longtime privately held newspaper companies that took advantage of opportunities. Among these were Ogden Newspapers, Jeff Brown’s Home News Enterprises, Sample News Group and Boone Newspapers. Additionally, local interests bought newspapers in Santa Rosa, California; Lawton, Oklahoma; Maine; and Philadelphia.