Lee Enterprises, Incorporated (NYSE: LEE), a trusted local news
provider and leading platform for advertising in 77 markets,
announced today it has completed its acquisition of BH Media
Group’s (“BHMG”) publications and The Buffalo News.
The acquisition nearly doubled Lee’s audience size and added 30
daily newspapers, more than 49 paid weekly publications with
digital sites, and 32 other print products from BHMG, as well as
The Buffalo News, to Lee’s portfolio of high-quality local
publications. Lee’s portfolio is now comprised of 77 publications
in 77 communities. Additionally, after the elimination of the
management agreement and adding operating expenses from the lease
agreement, the transaction is expected to drive an 87% increase in
revenue, a 40% increase in adjusted EBITDA, and immediately reduce
Lee’s leverage to 3.5x, even before $20-25 million in anticipated
annual revenue and cost synergies.
As previously announced, and in connection with the transaction,
Berkshire Hathaway provided approximately $576 million in long-term
financing to Lee at a 9% annual rate. The proceeds from the
financing were used to pay for the acquisition and refinance Lee’s
existing debt, and also allowed Lee to terminate its revolving
credit facility. Berkshire Hathaway is now Lee’s sole lender.
Mary Junck, Chairman, said, “We are pleased to complete this
compelling and transformative transaction, which enhances Lee’s
position strategically, operationally and financially. This
transaction reinforces our conviction in the value and power of
local news, adding 31 publications with deep roots in their
communities, enabling Lee to serve even more readers and
advertisers. Further, this transaction allowed Lee to address our
long-term debt on attractive terms while deepening our relationship
with Berkshire Hathaway – now our sole lender – to enable more
flexibility as we continue to invest in our business with a
digital-first mindset. We join our shareholders, publishers,
employees and audiences in their excitement about this transaction
and the opportunities that lie ahead for Lee.”
Kevin Mowbray, President and Chief Executive Officer, said, “Lee
today leads the industry in digital revenue growth and operating
performance, and this transaction unlocks new opportunities to grow
our top line and further accelerate our digital transformation.
After over 18 months of managing the BH Media Group publications,
Lee looks forward to leveraging our deep knowledge of this
portfolio to drive further efficiencies across our expanded and
integrated operation. This transition, which is already underway,
is underpinned by shared values and an alignment around our mission
to deliver high-quality local news. We are confident that we have
the right strategy and operational expertise to realize the full
benefits of this transaction for our readers, advertisers,
shareholders and communities we serve.”
Tim Millage, Vice President, Chief Financial Officer and
Treasurer, said, “With a stronger growth profile through the
addition of BH Media Group and a more flexible balance sheet, Lee
will be able to de-lever more quickly, with the goal of reaching
our target leverage of less than 2.0x in 2024. Lee will continue to
prioritize deleveraging longer-term, including strategically
monetizing noncore assets.”
About Lee EnterprisesLee Enterprises is a
leading provider of local news and information, and a major
platform for advertising, with daily newspapers, rapidly growing
digital products and, following its recent acquisition of BH Media
Group, nearly 350 weekly and specialty publications serving 77
markets in 26 states. Lee's newspapers have average daily
circulation of more than 1.2 million, and reach more than 44
million digital unique visitors. Lee's markets include St. Louis,
MO; Buffalo, NY; Omaha, NE; Richmond, VA; Lincoln, NE; Madison, WI;
Davenport, IA; and Tucson, AZ. Lee Common Stock is traded on the
New York Stock Exchange under the symbol LEE. For more information
about Lee, please visit www.lee.net.
NotesAdjusted EBITDA is a non-GAAP financial
performance measure that enhances financial statement users overall
understanding of the operating performance of the Company. The
measure isolates unusual, infrequent or non-cash transactions from
the operating performance of the business. Adjusted EBITDA is
defined as net income (loss), plus nonoperating expenses, income
tax expense (benefit), depreciation and amortization, assets loss
(gain) on sales, impairments and other, and restructuring costs and
other.
Forward-Looking StatementsThe Private
Securities Litigation Reform Act of 1995 provides a “safe harbor”
for forward-looking statements. This release contains information
that may be deemed forward-looking that is based largely on our
current expectations, and is subject to certain risks, trends and
uncertainties that could cause actual results to differ materially
from those anticipated. Among such risks, trends and other
uncertainties, which in some instances are beyond our control,
are:
- Our ability to generate cash flows and maintain liquidity
sufficient to service our debt;
- Our ability to manage declining print revenue;
- That the warrants issued in our 2014 refinancing will not be
exercised;
- Change in advertising and subscription demand;
- Changes in technology that impact our ability to deliver
digital advertising;
- Potential changes in newsprint, other commodities and energy
costs;
- Interest rates;
- Labor costs;
- Significant cyber security breaches or failure of our
information technology systems;
- Legislative and regulatory rulings;
- Adverse impacts to elements of our business resulting from
public health issues, including the outbreak of COVID-19;
- Our ability to achieve planned expense reductions;
- Our ability to maintain employee and customer
relationships;
- Our ability to manage increased capital costs;
- Our ability to maintain our listing status on the NYSE;
- Competition; and
- Other risks detailed from time to time in our publicly filed
documents.
Any statements that are not statements of historical fact
(including statements containing the words “may”, “will”, “would”,
“could”, “believes”, “expects”, “anticipates”, “intends”, “plans”,
“projects”, “considers” and similar expressions) generally should
be considered forward-looking statements. Readers are cautioned not
to place undue reliance on such forward-looking statements, which
are made as of the date of this release. We do not undertake to
publicly update or revise our forward-looking statements, except as
required by law.
Additional risk factors that could cause actual results to
differ materially from expectations include, but are not limited
to, the risks identified by Lee in its most recent Annual Report on
Form 10-K, its Quarterly Reports on Form 10-Q and its Current
Reports on Form 8-K. All forward-looking statements speak only as
of the date on which they are made. Except to the extent required
by law, Lee expressly disclaims any obligation to release publicly
any updates or revisions to any forward-looking statements
contained herein to reflect any change in its expectations with
regard thereto or change in events, conditions or circumstances on
which any statement is based.
Investor ContactIR@lee.net(563) 383-2100 |
Media ContactCharles ArmsCharles.Arms@lee.net
(563) 383-2129 |
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