Postmedia acquires Brunswick News Inc. and extends the maturity of its first and second lien notes

TORONTO, February 18, 2022–(BUSINESS WIRE)–Postmedia Network Canada Corp. (“Postmedia” or the “Company”) today announced that it has entered into a definitive agreement with JD Irving, Limited (“JDI”) to purchase all of the issued and outstanding shares of Brunswick News Inc. ( “BNI”). Proposed Acquisition Includes BNI’s Daily and Weekly Newspapers, Digital Properties and Parcel Delivery Business for Consideration of $7.5M in Cash and $8.6M in Voting Shares Variable Voting Share at an implied price of $2.10 per Variable Voting Share (subject to a working capital adjustment).

The proposed transaction includes BNI’s proprietary distribution software that powers its parcel delivery business. New Brunswick daily and weekly newspapers – including the Telegraph-Journal, Times Globe, Times & Transcript, The Daily Gleaner, Miramichi Leader, Woodstock Bugle-Observer, Bathurst Northern Light, Kings County Record, The Campbellton Tribune and The Victoria Star – join the Postmedia network of media properties.

“We are delighted that Postmedia, one of Canada’s largest media companies, is acquiring all of our newspapers and media products through the purchase of Brunswick News, which represents a media exit for JD Irving. , Limited. Postmedia is well positioned to make the transition to the digital world of providing New Brunswickers with a reliable source of local, regional and national news as well as access to much broader media coverage,” said Jim Irving, Co-CEO of JD Irving, Limited.

Upon closing of the acquisition, Postmedia and JDI will enter into an investor rights agreement which will include standstill and voting clauses. Postmedia and JDI will also enter into a conversion restriction agreement pursuant to which JDI may not convert its Postmedia Variable Voting Shares into Voting Shares, subject to certain exceptions.

“Postmedia believes that BNI’s business in Eastern Canada is highly complementary to our existing business and aligns strongly with our strategic priorities,” said Andrew MacLeod, President and CEO, Postmedia. “These titles have a proud history of providing excellent journalism across New Brunswick and we look forward to continuing that legacy. The addition of the BNI brands enables Postmedia to serve audiences and marketers from the Pacific to the Atlantic while continuing to develop national distribution. platform and network for our parcel delivery business.”

The proposed transaction is subject to various closing conditions, including the approval of the Toronto Stock Exchange (the “TSX”).

Funding extension

Postmedia also announced today that it has entered into definitive agreements, subject to customary closing conditions, providing for an extension of the maturity of its First Lien and Second Lien Notes (collectively, the “Notes”) of approximately three and a half years for February 17, 2027 and August 17, 2027, respectively on terms substantially similar to the existing terms, including interest rates, and extended the maturity of its revolving credit facility by three years asset-based (“ABL Facility”) until October 1, 2025.” These extensions demonstrate a vote of confidence from our key stakeholders and give us a longer track for our digital transformation,” said Mr MacLeod.

As part of the extension, Postmedia will repay approximately $15 million of the principal amount of the First Lien Notes and holders of the First Lien Notes will receive 794,630 Postmedia Variable Voting Shares, which shares will be subject to certain restrictions on conversion into shares with voting rights. The issuance of Postmedia shares and the extension of the maturity of the First Lien Notes and Second Lien Notes will be subject to customary closing conditions, including the approval of the TSX and, in the case of the extension of the maturity of the Second Lien Notes, shareholder approval under the rules of the TSX. It is currently expected that such shareholder approval will be obtained by means of written shareholder consents. However, if approval is not obtained by means of written consents, it is currently expected that approval will be sought by way of a meeting of shareholders.

Advisors

Canaccord Genuity Corp. acted as financial advisor and Goodmans LLP acted as legal advisor to Postmedia in connection with the acquisition of BNI and the extension of the note financing.

Marckenz Group Capital Partners acted as financial advisor and McCarthy Tétrault LLP acted as legal advisor to JDI.

Note: All dollar amounts are in Canadian dollars

About Postmedia Network Canada Corp.

Postmedia Network Canada Corp. (TSX: PNC.A, PNC.B) is the proprietary holding company of Postmedia Network Inc., a Canadian news media company representing more than 120 brands across multiple print, online and mobile platforms. Award-winning journalists and innovative product development teams bring engaging content to millions of people every week, when and where they want it. This exceptional content, reach, and reach provides advertisers and marketers with compelling solutions to effectively reach target audiences. For more information, visit www.postmedia.com.

Forward-looking information
This press release contains certain information that is “forward-looking information” concerning anticipated future events, results, circumstances, performance or expectations regarding the Company and its operations. Forward-looking information includes statements that are predictive in nature, depend on future events, trends, prospectuses or conditions, or include words such as “believe”, “expect”, “intend”, “estimate”, “anticipate”, “may”, “will”, “could”, “will”, “should” and similar expressions and their derivatives. The forward-looking statements contained in this press release include, but are not limited to, statements regarding the closing of the BNI Acquisition, the BNI Acquisition and the anticipated benefits to Postmedia, including potential synergies, and the extension of the maturity dates of the Prime Lien Notes and second lien. These forward-looking statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to: the satisfaction or waiver of all closing conditions (including approval of e the TSX and shareholder approval under TSX rules) and the completion of the acquisition of BNI; the realization of potential synergies in connection with the integration of the operations of BNI with the operations of Postmedia; and the completion of the extension of the maturity dates of the First Lien Notes and the Second Lien Notes. Forward-looking information is based on underlying assumptions and the beliefs, estimates and opinions of management, and is subject to inherent risks and uncertainties (many of which are beyond Postmedia’s control) surrounding future expectations generally, which may cause actual results to vary from plans, objectives and estimates. These risks and uncertainties include, among others: the possibility that the proposed transaction and/or the proposed extension of the Bonds will not be completed (including, without limitation, due to the inability to obtain regulatory approvals or satisfy applicable closing conditions) and the risks associated with the possibility of not realizing the synergies anticipated in the integration of BNI’s operations with Postmedia’s operations, as well as the various risk factors described in the section entitled ” Risk factors” contained in our annual management report for the years ended August 31, 2021, 2020 and 2019. Although the Company bases this information and statements on assumptions deemed reasonable when made, they do not guarantee the performance future and actual results of operations, financial condition and liquidity, or changes in the industry in which the Company operates, may differ rer materially of such information and statements in this press release. Given these risks and uncertainties, you should not place undue reliance on any forward-looking information or forward-looking statements, which speak only as of the date of such information or statement. Except as required by law, the Company does not undertake, and specifically disclaims, any obligation to update such information or statements or to publicly announce the results of any revisions to such information or statements.

See the source version on businesswire.com: https://www.businesswire.com/news/home/20220217005987/en/

contacts

Media Contact
Phyllise Gelfand
Vice President, Communications
(647) 273-9287
[email protected]

Contact Investor
Mary Anne Lavallee
Executive Vice President, Chief Operating Officer and Interim Chief Financial Officer
(416) 442-3448
[email protected]

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