21st Nov 2012 07:00
DMGT agrees to sell Northcliffe to Local World, creating a new force in regional media
* DMGT to receive £52.5m cash and shares amounting to a 38.7% stake in new
media group
* The Iliffe Family, Trinity Mirror and financial investors take remaining
stakes * New group to comprise more than 107 newspapers and 60 local content websites * David Montgomery and Steve Auckland to lead new venture 21 November 2012, London: Daily Mail and General Trust plc (DMGT.L) todayannounced that it has reached agreement to sell Northcliffe Media, its regionalnewspaper business, to Local World, a newly-formed media group that willcombine the Northcliffe titles with those of Iliffe News & Media Limited. DMGTwill receive consideration of £52.5m in cash and a 38.7% shareholding in LocalWorld, which will allow DMGT to benefit from the potential upside from theevolution of the regional newspaper industry. Local World will have anenterprise value of c.£100m at completion.The Iliffe family, owners of Yattendon Group, will sell Iliffe News & Media toLocal World in exchange for a 21.3% shareholding in the new business. TrinityMirror will acquire a 20% shareholding in Local World and the remaining LocalWorld shares will be purchased by other investors including Artefact Group, anInvestment Fund associated with Lord Ashcroft, and Odey Asset Management.Local World will become one of the UK's leading regional newspaper publishers,online content providers and local advertising platforms, with more than 107print titles and 60 websites. DMGT will contribute more than 80 titles to thenew venture, with another 36 coming from Iliffe News & Media.Steve Auckland, currently Chief Executive of Northcliffe, will become CEO ofLocal World. Rachel Addison, Group Finance Director of Northcliffe, will assumethe same role at the new company alongside a board of directors drawn from themain shareholders. The company will be chaired by David Montgomery.
Auckland said: "Local World will be a comprehensive local content provider, offering the best and most trusted source of news, views and advertising in print, online and mobile, to its local audiences in the UK. The new company will be well-resourced, entrepreneurial, and able to respond quickly to the differing requirements of local communities."
Local World, with a combined weekly newspaper audience of 6 million readers and 7 million online users, aims to revitalise local media by offering fully integrated print and digital media services that focus on relevant content, advertising and local services across the UK.
Local World will comprise:
* 63 local portal websites; * 16 daily titles; * 36 paid weekly titles * 40 free weekly titles; and
* two Metro franchises and a number of niche products including magazines.
The enlarged regional media company is expected to employ more than 2,800 people, with pro forma combined operating profits of £21 million on revenues of £273 million for the year to 30 September 2011.
Local World has committed to investments in innovative information technologysystems to help advertisers target digital audiences. It is developing aportfolio of commercial products for small and medium sized advertisers andplans intensive training for editorial and commercial staff to develop digitalservices for local users.Martin Morgan, Chief Executive of DMGT, said: "This is good news for DMGT, forall who work at Northcliffe and for the future of local news media. With thismove we receive cash from the sale and also retain a stake in a business withexcellent prospects. Local World has talented people and a clear vision for thefuture of local media. I think the media industry has been waiting for thislogical next step for regional newspapers."
Transaction highlights
* Northcliffe Media comprises the regional newspaper and digital media
business within the DMGT group, operating from 23 publishing centres across
the UK;
* On completion, DMGT will receive £52.5m in cash and shares in Local World
equal to 38.7% of the equity, which will allow DMGT to benefit from the potential upside from the evolution of the regional newspaper industry; * Local World will have an enterprise value of c.£100m at completion;
* For the financial year ended 30 September 2011, Northcliffe Media had gross
assets of £32m and made an operating profit of £17m;
* Part of the cash consideration will be contributed to DMGT group pension
funds, with the remainder being used for acquisitions in line with DMGT's
acquisition strategy;
* The DMGT group will provide services to Local World on a transitional basis
for a limited period to facilitate a smooth transition of the business;
* Northcliffe Media will be consulting with its employees who are affected by
the disposal and the transaction is expected to complete around the end of
the year after the necessary consultation procedures have taken place.
DMGT will issue further information about current trading when it issues preliminary earnings for the financial year ending 30 September 2012 on 22 November 2012.
Further details on the Local World can be found at www.local-world.co.uk.
Lazard & Co., Limited is acting as sole financial adviser to DMGT in relation to the transaction.
For further informationDMGT
For analyst and institutional enquiries:
Stephen Daintith, Finance Director, DMGT +44 20 3615 2902Adam Webster, Head of Management Informationand Investor Relations, DMGT +44 20 3615 2903
For media enquiries:
Kim Fletcher / Will Carnwath, Brunswick Group LLP +44 20 7404 5959
Local World +44 20 7400 1450
For analyst and institutional enquiries:
David Montgomery Steve Auckland Karen Wall For media enquiries:
Elly Williamson, M:Communications +44 20 7920 2339
Notes to Editors
DMGT will have two Directors on the Board of Local World. They will be:
* Kevin Beatty, Chief Executive Officer, A&N Media * Adrian Perry, Deputy Finance Director, DMGT Plc
About DMGT:
DMGT is an international group quoted on the London Stock Exchange with a portfolio of market-leading digital, information, media and events businesses.
Group revenues are split broadly equally across the B2B and Consumerbusinesses.The B2B business comprises: * Risk Management Solutions * dmg::information * dmg::events * Euromoney Institutional Investor
The Consumer business, known as A&N Media, comprises:
* The Daily Mail, The Mail On Sunday and MailOnline * Metro * Evenbase (Jobsite & Jobrapido) * Zoopla Property Group (Zoopla & Prime Location)
DMGT seeks out innovative solutions to customers' demands for information and supports a diverse group of high quality, entrepreneurial, media and information assets.
DMGT's ambition is to provide the highest quality content and services, acrossthe most attractive growth markets in innovative, responsible and sustainableways, building on its track record of earnings and dividend growth.
About Yattendon Group
Iliffe News & Media (INML), is a wholly owned subsidiary of Yattendon GroupPlc, a private company owned by the Iliffe family. The Group is made up of fourprincipal operating businesses covering a range of sectors including localmedia, agriculture, property and marine leisure. It has operations in the UK,Europe and Canada.Important noticeLazard & Co., Limited, which is authorised and regulated in the United Kingdomby the Financial Services Authority, is acting exclusively for DMGT and no oneelse in connection with the sale of Northcliffe by DMGT and will not beresponsible to any other person for providing the protections afforded toclients of Lazard & Co., Limited or for providing advice in relation to thesale of Northcliffe by DMGT or the other matters described in thisannouncement. Neither Lazard & Co., Limited nor any of its affiliates owes oraccepts any duty, liability or responsibility whatsoever (whether direct orindirect, whether in contract, in tort, under statute or otherwise) to anyperson who is not a client of Lazard & Co., Limited in connection with anystatement contained herein or otherwise.
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