The publisher of the Daily Mirror has confirmed its deal to take control of Local World, cementing its place as the UK’s biggest regional newspaper publisher.
Trinity Mirror, which also owns the Sunday People and Sunday Mirror, will buy out the 80% it does not already own in the Local World in a deal that values the business at about £220m.
Local World owns 83 print titles including 16 dailies and 36 paid-for weeklies.
The announcement was expected last week but delays in finalising details means it was delayed until the stock market opened at 7am on Wednesday.
Trinity Mirror said:“The acquisition values Local World on a debt-free cash-free basis at £220m. The purchase price for the 80.02% shareholding not already owned by Trinity Mirror is £154.4m, being the sellers’ total share of the equity value of £193m. Trinity Mirror will also assume debt, working capital and debt-like items of circa £27m and will incur some £6m of transaction costs at completion which together with the equity consideration represents total consideration of £187.4m.”
Simon Fox, the Trinity Mirror chief executive, said: “This is a good day for local media. Local World is a business we know and respect and by combining it with Trinity Mirror we will create an organisation of scale, with the talent and financial capacity to invest and adapt to the rapidly changing media landscape. It is a vote of confidence in local press and its future.”
Daily Mail & General Trust said it would receive about £73m for its 38.7% stake in Local World.
Trinity has agreed to sell a handful of titles in Cambridge and Hertfordshire to Edward Richard Iliffe, owner of Iliffe parent Yattendon Group, which holds a 21.3% stake in Local World, for £15.8m.
Local World is also backed by Crispin Odey’s Odey Asset Management and Artfefact Group.
Ex-Trinity Mirror and Mecom chief David Montgomery, the Local World group chief executive, who also owns a stake in the business, is to leave the company after completion of the deal.
Montgomery said: “Local World was founded three years ago with a clear vision to reinvigorate regional media with an unrelenting focus on our content, audience and advertisers. I am proud of what we have achieved. Local World is full of energy and talent and Trinity Mirror is acquiring a vibrant business with a strong future. I want to take this opportunity to thank everyone who has made Local World the success it is today.”
Rachel Addison, the Local World chief operating officer, will be promoted to the role of managing director, reporting to Trinity Mirror chief executive Simon Fox.
Local World was formed through a merger of more than 100 titles from Daily Mail & General Trust’s Northcliffe Media, and Iliffe News & Media – including the Nottingham Post and Cambridge News – in 2012.
The deal, which is likely to need clearance from the competition regulator, will make Trinity Mirror a local newspaper giant, with nearly 200 titles.
Trinity Mirror already owns a portfolio of regional titles which include the Birmingham Mail, Manchester Evening News and Liverpool Echo.
