Postmedia Acquires 175 Sun Media Properties For $316M

Paul GodfreyPostmedia Network is getting serious about the newspaper business, earlier this morning they announced they have acquired 175 English language newspapers, specialty publications and digital properties, including the Sun chain of dailies, consisting of The Toronto Sun, The Ottawa Sun, The Winnipeg Sun, The Calgary Sun and The Edmonton Sun, as well as The London Free Press and the free 24 Hours dailies in Toronto and Vancouver.
The total purchase price is $316 million in cash less a $10 million adjustment related primarily to real estate properties to be disposed of by Sun Media prior to closing, and other customary price adjustments to be determined subsequent to closing. The transaction also includes the acquisition of associated English language digital properties, including the Canoe portal outside of Quebec, as well as QMI’s Islington printing plant in Ontario, and 34 owned real estate properties in Ontario, Alberta and Manitoba.

“This acquisition brings together an impressive stable of brands that collectively create a stronger Canadian media platform that is better positioned to compete against foreign-based digital offerings and offers a greater range of choices to our readers,” said Paul Godfrey, President and Chief Executive Officer of Postmedia. “We intend to continue to operate the Sun Media major market dailies and their digital properties side by side with our existing properties in markets with multiple brands as we have in Vancouver with the Province and the Vancouver Sun for more than 30 years. Our advertisers will have the opportunity to reach audiences across the country with a made-in-Canada option for their marketing programs.”

This is a surprising move considering the financial situation that Postmedia Network continues to find it self it, but perhaps there is a method to the madness in this digital age to acquire more traditional forms of news.  Postmedia is at least $488 million in debt currently, the company lost $20.6 million in the third quarter of 2014 and $160 million in 2013.  The company’s revenue from print advertising declined by 14.3 per cent during the third quarter of 2014.

Postmedia CEO Paul Godfrey (shown above), was formerly president and CEO of Sun Media.