APN News & Media chairman Peter Cosgrove has described the sale of the company’s Australian Regional Media division to News Corp Australia for $36.6 million as “another significant milestone” in the direction of the company.
APN wants to focus on its radio and outdoor media assets which it believes hold great potential for its future. The sale is the second major print divestment for the company, after APN shareholders voted last week to demerge its New Zealand business, NZME, paving the way for a merger with Fairfax Media’s NZ assets.
News Corp Australia will acquire 12 daily newspapers and more than 60 community titles under the deal with APN.
The regional network reaches 1.6 million across Queensland and northern NSW and includes The Sunshine Coast Daily, The Gympie Times , Toowoomba’s The Chronicle and The Daily Examiner in Grafton.
News’ existing stable of regional mastheads include the Townsville Bulletin, Cairns Post, Gold Coast Bulletin and Geelong Advertiser, which recently were consolidated in to a new publishing division.
Mr Cosgrove said the divestment of ARM was a historic day for the company. “APN has been the custodian of some wonderful newspapers whose community roots go back over 150 years,” he said.
“We are now passing that ownership onto another media group with deep publishing experience across regional Australia.”
News Corp Australia executive chairman Michael Miller said the purchase would give the group a presence in regional Queensland. He described the titles as “strong brands” that had long-standing relationships with their respective communities.
Significant cost and efficiency synergies would occur through consolidation of production and distribution operations, said Mr Miller, a former CEO of APN.
The purchase, which requires regulatory and shareholder approval, includes print facilities.
According to APN 2015 full year results, ARM generated revenues of $188.5 million and EBITDA of $18.4 million, although that result followed a non-case write-down of $50.8 million.
APN’s 70-plus titles were put up for sale in February when CEO Ciaran Davis said he did not want to invest in a digital growth strategy for the newspapers.
After the announcement of the sale on Tuesday, Mr Davis said the APN management team was executing on a clear strategy to own and invest in its highly successful radio business and growing outdoor division.
“Radio and Outdoor are terrific mediums for advertisers. The sectors are growing, they are complementary, and they have both led innovation in the media industry across the digital sector,” Mr Davis said.
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