YARDLEY, Pa. – The Journal Register Co. (NYSE:JRC) Friday evening announced a definitive agreement to sell two of its New England Cluster community newspapers to GateHouse Media Inc. for about $72 million.
Included in the sale are The Herald News in Fall River, circulation 20,932, and the Taunton Daily Gazette, circulation 9,437, plus five non-daily publications, which GateHouse identified as three weekly newspapers and two “shoppers,” all in southeastern Massachusetts.
Robert M. Jelenic, Journal Register’s chairman and CEO, said “We thank all of our talented employees at our Massachusetts newspapers for their contributions over the years and wish them all well.”
The deal is expected to include payments of $70 million in cash and $2 million in estimated working capital, subject to certain post-closing adjustments, the company said.
The transaction is expected to close by the end of this year, subject to regulatory approvals and customary conditions, the companies said.
“We are looking forward to completing this strategic addition to our local media portfolio and the accretive impact these assets will have on free cash flow per share,” said Michael E. Reed, CEO of GateHouse. “The Fall River and Taunton assets fit extremely well with our existing base of Massachusetts-area publications and are the premiere local media franchises in their respective markets. In addition, due to their proximity to our existing operations, we will be able to benefit from the cost savings and revenue generation opportunities that are inherent in being part of a cluster.”
The Journal Register said it expects a pre-tax gain on the sale of about $46 million, and after-tax cash proceeds of about $50 million, which it said will be used primarily to pay down debt.
The company, which on Aug. 28 had saidit was seeking to sell the newspapers in its Central New England Cluster, said it is continuing its review of the potential sale of its remaining properties in the cluster. They include The Call in Woonsocket, The Times in Pawtucket, the Kent County Daily Times and Warwick Daily Times and the weekly Southern Rhode Island Newspaper Group, based in Wakefield.
GateHouse Media, based in Fairport, N.Y., owns more than 415 community publications in 18 states, and more than 230 related Web sites. Additional information is available at www.gatehousemedia.com.
Journal Register Co. owns 27 daily newspapers, 366 non-daily publications and the JobsInTheUS network of 10 employment Web sites in the Northeast. It operates 231 Web sites, including publication-affiliated and employment sites. Additional information is available at www.journalregister.com.
