Lee Enterprises has completed its acquisition of BH Media
Group’s publications and The Buffalo News, Iowa-based Lee announced today.
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 local publications. Lee’s portfolio now consists of
77 publications in 77 communities.
After the elimination of a Lee-BH Media
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, according to
Lee.
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.
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