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Asociación Técnica de Diarios Latinoamericanos


Boletín Semanal julio 23, 2020

Michael Reed, the chairman and CEO of New Media Investment Group, hit the road Tuesday to convince investors that they should stay the course as he tries to merge New Media’s Gatehouse Media with USA Today owner Gannett Corp.

The merger, announced Aug. 5, has gotten off to a rocky start, including opposition from private equity firm Alden Capital.

In the roadshow presentation that the company filed with the SEC before markets opened Tuesday, Reed predicted the stock price of the combined companies could end up in the $18-to-$24 range.

The slides say New Media, which has been trading under $8 share in recent days, has traditionally traded at six to seven times earnings before interest, tax, depreciation and amortization.

But at the low end of a 4.5 times Ebitda, the combined company would yield a stock price of $18 a share. If it reaches the higher end and trades at 6.5 times Ebitda, that translates into $30 stock price.

Reed also said the combined company will have $4.4 billion in revenue out of the gate. Interestingly, the file with the SEC did not mention any newspaper sales, but it does mention “monetizing real estate,” which one source close to the situation said could bring in up to $250 million.

The company said it expects to achieve $275 million to $300 million in “synergies,” which The Post has previously reported.

New Media also acknowledged for the first time that it will have to spend $30 million a year over the next two years to achieve those synergies — accounting for buyouts and various other costs.