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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Lee Enterprises Inc | NYSE:LEE | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 28.50 | 0 | 01:00:00 |
By Chris Wack
Lee Enterprises Inc. (LEE) said Wednesday it is buying Berkshire Hathaway's BH Media Group publications and The Buffalo News for $140 million in cash.
The companies said Berkshire Hathaway is providing $576 million in long-term financing to Lee at a 9% annual rate. The proceeds from the Berkshire financing will be used to pay for the acquisition, refinance Lee's $400 million of existing debt, and provide enough cash on Lee's balance sheet to allow for the termination of Lee's $23 million revolving credit facility.
After the deal closes, Berkshire Hathaway will be Lee's sole lender.
BHMG had 2019 revenues of $373.4 million and adjusted Ebitda of $47.4 million. Lee has managed BHMG's publications since July 2018 under a management agreement. BHMG's real estate and cash are excluded from the acquisition.
Lee said it expects $20 million to $25 million of anticipated annual revenue and cost synergies.
"We had zero interest in selling the group to anyone else for one simple reason: We believe that Lee is best positioned to manage through the industry's challenges," said Warren E. Buffett, chief executive of Berkshire Hathaway. "I am confident that our newspapers will be in the right hands going forward."
Lee said the transaction will be immediately accretive to earnings.
As part of the agreement, Lee will enter into a 10-year lease for BHMG's real estate. The initial lease payment is $8 million annually, payable in monthly installments, with Lee assuming responsibility for the maintenance and expense associated with the BHMG property.
Write to Chris Wack at chris.wack@wsj.com
(END) Dow Jones Newswires
January 29, 2020 07:39 ET (12:39 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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