NEW YORK--(BUSINESS WIRE)--New Media Investment Group Inc., (“New Media” or the “Company”; NYSE:NEWM), announced today that it acquired the Victorville Daily Press along with other publications and related assets from Freedom Communications for a purchase price of $8.0 million. The publications are located in and around Victorville, California with a circulation of about 50,000.
“This is the first acquisition by New Media,” said Mike Reed, Chief Executive Officer of New Media. “The Victorville Daily Press and related publications meet the criteria we look for in an acquisition, including market size, a solid retail base, the opportunity to leverage New Media’s infrastructure to grow digital revenue and our financial criteria. With revenue of about $12.5 million and operating margins before depreciation and amortization of slightly more than 20%, we expect the transaction to be immediately accretive to our results.”
Kirk Davis, Chief Operating Officer of New Media, added, “I am thrilled that the Victorville publications will be part of New Media. This is a strong local franchise with a long history as the primary source of news and information serving the local communities. We are excited to work with the Victorville team and look forward to enhancing the partnership they have with their communities.”
About New Media Investment Group Inc.
New Media is focused primarily on investing in a high quality, diversified portfolio of local media assets, and on growing existing advertising and digital marketing businesses. The Company is one of the largest publishers of locally based print and online media in the United States as measured by number of daily publications. The Company operates in 338 markets across 24 states. New Media’s portfolio of products, which includes 435 community publications, 353 related websites, and six yellow page directories, serves more than 128,000 business advertising accounts and reaches approximately 10 million people on a weekly basis.
By that I'm assuming you're referring to the NCT drop as the equalizer, is that right? In a sense, the drop, spread across the deep number of issued units in the old company, supports the emergence of new shares in NEWM. That much I get but I'm nevertheless betting that NCT will begin its return to higher valuation tomorrow. The investing public is accustomed to units in the $5.50 and higher range and short term memories tend to guarantee a return to loftier levels. I hope I'm right as Friday's drop caught me by surprise.
Newcastle Declares Record Date & Distribution Date For Spin-Off of New Media Investment Group Inc. (1/28/14)
NEW YORK--(BUSINESS WIRE)--Newcastle Investment Corp. (“Newcastle” or the “Company”; NYSE:NCT) announced today that its Board of Directors has formally declared the distribution of its equity interest in New Media Investment Group Inc. (“New Media”). Newcastle’s equity interest represents 25,373,120 shares (the “Distributed Shares”), or approximately 85% of the total number of outstanding shares of New Media common stock. Following the distribution, New Media will be an independent, publicly traded company (NYSE: NEWM) primarily focused on investing in local media assets and on growing its existing online advertising and digital marketing services business.
The distribution will be made on or about February 13, 2014 (the "Distribution Date") to Newcastle common stockholders of record ("NCT Record Holders") as of 5:00 p.m., Eastern Time, on February 6, 2014 (the "Record Date").
A registration statement relating to the Distributed Shares has been filed with the Securities and Exchange Commission (the “SEC”) but has not yet become effective. Newcastle expects the registration statement to be declared effective in the coming days. The Distributed Shares may not be distributed prior to the time the registration statement becomes effective. A copy of the prospectus may be obtained from New Media Investment Group Inc., Attention: Investor Relations, 1345 Avenue of the Americas, New York, New York 10105, Tel: 212-479-3160.
The distribution ratio for the spin-off is 0.07219 shares of New Media for each share of Newcastle common stock held as of the Record Date. Fractional shares will not be distributed in the spin-off. Instead, as soon as practicable after the spin-off, American Stock Transfer & Trust Company, LLC, the distribution agent, will aggregate fractional shares and sell these shares in the open market at prevailing market prices and distribute the applicable portion of the aggregate net cash proceeds of these sales to each holder who otherwise would have been entitled to receive a fractional share in the spin-off.
Trading Before and on the Distribution Date
The New York Stock Exchange (“NYSE”) has informed Newcastle that, in connection with the spin-off, it will establish three trading markets beginning on February 4, 2014 and continuing through the Distribution Date:
• In the “regular way” market (NYSE: NCT), shares of Newcastle common stock will trade with the right to the Distributed Shares.
• In the “ex-distribution” market (NYSE: NCT WI), shares of Newcastle common stock will trade without the right to the Distributed Shares.
• In the “when-issued” market (NYSE: NEWM WI), the right to the Distributed Shares will be traded.
Newcastle shares trading in the “regular-way” market will trade with an entitlement to the Distributed Shares. Therefore, a shareholder who sells Newcastle common stock in the “regular-way” market (including on the Distribution Date) will also be selling the right to receive Distributed Shares.
Investors are encouraged to consult with their financial advisors regarding the specific implications of buying or selling shares of Newcastle common stock on or before the Distribution Date.
Trading after the Distribution Date
On the first trading day after the Distribution Date, the Distributed Shares will commence trading on a “regular way” basis under the ticker symbol “NEWM,” and Newcastle’s shares of common stock will commence trading on an “ex-distribution” basis under the ticker symbol “NCT.”
Certain tax considerations are summarized below. This summary does not constitute tax advice. It does not purport to be complete or to describe the tax consequences that may apply to particular categories of stockholders. For more information, please refer to New Media’s registration statement on Form S-1, as filed with the SEC. Newcastle stockholders should consult their own tax advisors regarding the tax consequences of the distribution to their particular situation, including, without limitation, the applicability and effect of any U.S. federal, state, local and foreign tax laws, the specific implications of selling Newcastle common stock on or prior to the Distribution Date, and the calculation of tax basis.
Tax Basis of the Distributed Shares
Shortly following the Distribution Date, Newcastle will announce Record Holders’ tax basis in the Distributed Shares, which will be equal to the fair market value of the Distributed Shares.
Taxability of the Distribution
The fair market value of the Distributed Shares, or a portion thereof, may be taxable. However, the taxable portion of the Distributed Shares, if any, cannot be determined until early 2015 because it is based on Newcastle’s total distributions in 2014 and Newcastle’s accumulated and current earnings and profits (“E&P”) at the end of 2014.
For U.S. federal income tax purposes, all of Newcastle’s distributions (whether in the form of cash or stock) in any year are treated as taxable dividends to the extent of its E&P for such year. Assuming that Newcastle has positive E&P at the end of 2014 and that total distributions in 2014 are less than or equal to E&P at the end of 2014, then the entire fair market value of each distribution, including the Distributed Shares, will be taxable. Assuming that Newcastle has positive E&P at the end of 2014 and that total distributions in 2014 are greater than E&P at the end of 2014, then a portion of each distribution, equal to the ratio of (i) E&P to (ii) the aggregate fair market value of 2013 distributions, will be taxable.
Newcastle focuses on investing in, and actively managing, real estate related assets and primarily invests in: (1) Senior Housing Assets and (2) Real Estate & Other Debt, in addition to other opportunistic investments. The Company conducts its operations to qualify as a real estate investment trust for federal income tax purposes. The Company is managed by an affiliate of Fortress Investment Group LLC, a global investment management firm.
New Media Investment Group Inc. is one of the largest publishers of locally based print and online media in the United States as measured by number of daily publications. It operates in 338 markets across 24 states. The NEWM portfolio of products, which includes 435 community publications, 353 related websites, 329 mobile sites and six yellow page directories, serves more than 128,000 business advertising accounts and reaches approximately 10 million people on a weekly basis.