5 must know things about Postmedia’s $316M deal
Posted October 6, 2014 4:45 pm.
This article is more than 5 years old.
Quebecor Media Inc. has signed a deal to sell Sun Media Corp.’s English-language operations to Postmedia Network Canada Corp. for $316 million.
The deal includes 175 newspapers and publications, including the Sun chain of daily newspapers as well as the London Free Press and the 24 Hours dailies in Toronto and Vancouver.
Here are five-must know things about the transaction.
1. The purchase price also includes English-language digital properties, including the Canoe portal outside of Quebec as well as Quebecor’s Islington printing plant and 34 real estate properties in Ontario, Alberta and Manitoba. Postmedia officials said the flagship Canoe network, which is No. 2 in news and information category slightly behind CBC, is anticipated to create Canada’s No. 1 news and digital network.
2. Senior Postmedia management officials have unique knowledge of Sun Media, Postmedia CEO and president Paul Godfrey said. He spent 16 years with Sun Media including several years as its president and CEO. Postmedia COO Wayne Parrish is a former president and CEO of Canoe, general manager and executive editor of the Toronto Sun and vice-president of strategic development of Sun Media.
3. Postmedia will finance the acquisition through a combination of debt and equity. The debt financing will be provided through the issuance of an additional $140 million of its currently outstanding 8.25 per cent senior secured notes. Postmedia intends to raise the balance by way of a rights offering.
4. Postmedia is expected to find $6 million-$10 million in cost savings a year within two years.
5. The deal still requires regulatory approval from the Competition Bureau.
