Dallas media firm to be sold
Australian group will pay $80 million for newspaper publisher
January 26, 2007
Dallas-based American Consolidated Media Inc., a publisher of 40 local newspapers in Texas and Oklahoma, said Thursday that it has agreed to be acquired by an Australian media company for $80 million.
American Consolidated's chief executive, Jeremy Halbreich, and his team "will continue in their current roles," said Alex Harvey, managing director of Australia's Macquarie Media.
Mr. Halbreich, who was president and general manager of The Dallas Morning News for 12 years before he founded American Consolidated in 1998, will also "drive any future consolidation activity," Mr. Harvey said.
Community newspapers are the key local advertising medium in their communities, Mr. Harvey said.
"The acquisition is part of a broader strategy to acquire and grow a portfolio of community newspaper businesses in the United States."
Community newspapers generate stable cash flows without relying on revenue from circulation or classified ads, which have been shrinking in the newspaper industry for years.
They also have low costs and the potential for higher profits through "organic growth and consolidation," Mr. Harvey said.
That basically describes the strategy that Mr. Halbreich has pursued.
American Consolidated generates almost all its newspaper ad revenue from local advertisers and has cut costs by centralizing most of its printing and many back-office support functions.
The company owns five daily newspapers – in Waxahachie, Alice, Brownwood and Stephenville, Texas, and in Miami, Okla.
It also owns 19 weeklies and 16 "shopper" and specialty publications and associated Web sites.
"The deal was very much predicated on the senior management team staying on and continuing to grow the company," Mr. Halbreich said.
U.S. community newspapers have highly fragmented ownership, and there are still many opportunities, he said.
Edward Atorino, media analyst at New York-based research firm Benchmark Co., said the $80 million price tag represents the high end of the range for newspaper properties today.
"That's not a bad price. Smaller papers are getting better multiples than the larger papers these days," he said.
Mr. Halbreich and his existing institutional investors, which include BancBoston Ventures and New York's Halyard Capital and Arena Capital Partners, will receive either cash or stock in the transaction.
Macquarie Media, listed on the Australian Stock Exchange, is the largest owner and operator of radio stations in Australia and owns a 60 percent interest in a major cable television company in Taiwan.
It is part of Australia's Macquarie Bank Ltd., which invests in public projects and other income-producing ventures around the world.
It's part of a consortium bidding to manage the State Highway 121 toll project in Collin County.
That decision is expected early this year.