BILLINGS - Lee Enterprises, the corporate owner of The Billings Gazette and four other Montana newspapers, announced Wednesday it will buy Berkshire Hathaway's BH Media Group for $140 million.
BHMG owns the print and digital operations of 30 daily newspapers, as well as more than 49 paid weekly publications with digital sites and 32 other print products, according to a press release posted on the company's website. BHMG had 2019 revenues of $373.4 million.
The transaction includes several daily newspapers, including the Buffalo News in New York, The Tulsa World in Oklahoma, and the Winston-Salem Journal in North Carolina, the press release states.
Lee Enterprises owns 49 daily publications, including the Missoulian, Ravalli Republic, Helena Independent Record and the Montana Standard.
Berkshire Hathaway is providing about $576 million in long-term financing to Lee at a 9% annual rate, the press release states. The proceeds from the Berkshire financing will be used to pay for the acquisition, refinance Lee’s approximately $400 million of existing debt, and provide enough cash on Lee’s balance sheet to allow for the termination of Lee’s revolving credit facility. Subsequent to the deal closing, Berkshire Hathaway will be Lee’s sole lender.
"This is a compelling and transformative transaction for Lee," Mary Junck, Lee’s Chairman, said. "It both refinances our long-term debt on attractive terms and provides new revenue opportunities as well as operational synergies across an expanded portfolio. We have enjoyed a strong, long-term relationship with Berkshire Hathaway, which has been a significant investor across our capital structure for years. As manager of BH Media for the past 18 months, we have developed a deep knowledge of these properties and tremendous respect for their operators. We know first-hand the power this acquisition brings for further accelerating our industry-leading digital revenue growth while maintaining our focus on delivering high-quality local news. We look forward to capturing the tremendous value of this transaction for readers, advertisers and shareholders.”
Warren E. Buffett, Berkshire Hathaway’s Chairman and CEO, said: “My partner Charlie Munger and I have known and admired the Lee organization for over 40 years. They have delivered exceptional performance managing BH Media’s newspapers and continue to outpace the industry in digital market share and revenue. We had zero interest in selling the group to anyone else for one simple reason: We believe that Lee is best positioned to manage through the industry’s challenges. No organization is more committed to serving the vital role of high-quality local news, however delivered, as Lee. I am confident that our newspapers will be in the right hands going forward and I also am pleased to be deepening our long-term relationship with Lee through the financing agreement.”