New Media Investment Group announces pricing for initial public offering
From out of the ashes of Gatehouse Media arose a new holding company, New Media Investment Group Inc. That new company now has priced its public offering of 6,500,000 shares of common stock at “approximately $105,625,000 million.” If that looks like a typo, well that is what the company said in its press release.
I doubt they are pricing their stock at $105 million million – instead I think they meant $105.625 million. I certainly hope they are better with their financials than they are press releases.
So, who exactly is “New Media”? They the company that recently bought The Providence Journal in a $46 million deal earlier this month. By going public they will be flush with more money that will enable them to do even more deals.
Jon Chesto of the Boston Business Journal beat me to the punch, speculating that New Media might be a buyer of Digital First Media. He is dead on – and further, I can’t think of any other existing media company that would be a logical buyer. If not New Media then it must be a PE firm. But is $105 million enough of a cash infusion to enable the purchase? Not likely, as DFM owns 76 daily newspapers and 160 weeklies. Call it a good down payment.
In either case, this all looks like a classic roll-up strategy, the kind seen in the B2B media business in the late ’90s into the next decade. As anyone involved in B2B can tell you, that didn’t work out so well for those working in the industry. As for those who invested in their roll-up strategies, their results were mixed, with some playing musical chairs well and selling out to other PEs in time to make money, while others bought, filed Chapter 11, then sold out. (Of course, those fees dumped onto the acquired properties provided good return for the investors.)
That the new holding company would call itself “New Media” should not be a surprise – it is branding as surely as calling one’s self “Digital First” is. “Digital” remains the best excuse for layoffs, divestments and spin-offs.