The owner of The Pantagraph, Lee Enterprises, is buying several more publications across the country.
The company said Wednesday it's reached a deal with Berkshire Hathaway, a multinational conglomerate owned by famous investor Warren Buffett, to acquire BH Media Group (BHMG) and The Buffalo News for $140 million. In return, Berkshire will use its proceeds and provide $576 million to finance Lee’s $400 million of existing debt with 9% annual rate.
The new deal includes a 10-year lease agreement with BHMG real estate. It adds 31 local daily news publications from across the country to Lee’s publication platform, doubling its audience size from 50 to 81 daily newspapers. BHMG owns the print and digital operations of 30 daily newspapers serving communities in 10 states along with 49 paid weekly publications with digital sites. Lee has managed BHMG’s publications since July 2018 under a management agreement.
Buffett praised Lee for its performance in managing publications under BHMG and said the organization is “best positioned to manage through the industry’s challenges.”
The transaction is expected to drive an 87% increase in revenue for Lee Enterprise and a 40% increase in the company's overall net income. Lee is expecting $20-25 million of anticipated annual revenue and savings in operating costs, creating a stronger financial profile and decreasing its debt rapidly.
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