One of the possible outcomes of the recapitalization of Canwest that is currently underway is a selling off of its newspapers. Business commentators have identified certain companies that may be interested and financially capable of purchasing at least some of the assets. The three that are mentioned most often by analysts as possibly interested in Canwest’s B.C. newspapers are Glacier Media, Transcontinental and Black Press. Here is short description of each company:
Transcontinental Inc.
Transcontinental, a Montreal-based company founded in 1978, is the largest commercial printer in Canada and sixth largest in North America, with over 35 plants. Its Transcontinental Media subsidiary publishes magazines such as Hockey News, Canadian Living and Les Affaires and newspapers across Quebec, Nova Scotia, Prince Edward Island and Newfoundland. It owns 12 dailies and about 90 weeklies. The company’s newspaper ownership strategy seems to favour dominance in particular geographic areas, with both dailies and weeklies in the same market.
The company has many unionized operations, including some CEP certifications. It recently shed 1,400 jobs as part of a downsizing and currently has approximately 13,500 employees in Canada, the United States and Mexico.
It reported total revenue of $2.4 billion in 2008. In the second quarter of 2009, Transcontinental reported revenues of $563.4 million, down 5% from $595.1 million in the second quarter of 2008. As of April 30, 2009, its net debt was $916.8 million. The company continues to pay a dividend of 8 cents per share per quarter. Its media sector revenue was $151.2 million in the second quarter of fiscal 2009. Its media sector operating income margin was 14.1%, compared to 16.5% in the same quarter of 2008.
Transcontinental paid its chief executive officer, Francois Olivier, total compensation of $1.4 million in 2008. The founder and executive chairman Remi Marcoux received $1.1 million. The chief financial officer Benoit Huard received $497,400, while Natalie Lariviere, president of the media sector, received $575,800.
Glacier Media
Glacier, based in Vancouver, began as a bottled water company in 1988, but got out of that business and in 1999 bought its first publishing titles. Since then it has grown rapidly to become a major media player. It bought the assets of Western Producer Publications in 2002 from a financially distressed former farmers’ cooperative, the Saskatchewan Wheat Pool. In the following few years it continued to expand, primarily in the Prairies and then in early 2006 it purchased most of Hollinger Canadian Newspapers. In 2008 Glacier had revenues of $249.1 million from newspapers and other publications in B.C. Alberta, Saskatchewan, Manitoba, Ontario and Quebec. Its gross profit was $94.2 million, a 10.7% increase over 2007.
Among its dailies across Canada are the Lethbridge Herald, Medicine Hat News, Thunder Bay Chronicle Journal and the Sherbrooke Record. Among its properties in B.C. are the Nelson Daily News, Cranbrook Daily Townsman, Kimberley Daily Bulletin, Kamloops Daily News, Prince George Citizen, Alaska Highway News, Dawson Creek Daily News, Prince Rupert Daily News, the Real Estate Weekly and Kodiak Press. It owns a minority interest in Kelowna’s Daily Courier and the Penticton Herald. Glacier’s newspaper and trade publication group has 2,228 employees, including many Local 2000 members across B.C.
The company is controlled by a private company, Madison Venture Corporation, whose principals are Sam Grippo, Jonathon Kennedy and Bruce Aunger. The three are, respectively, chairman, president and CEO and secretary of Glacier. Kennedy’s total compensation in 2008 from Glacier was $484,164. Glacier paid management fees of $611,005 in 2008 to Madison.
Glacier’s debt was $115.6 million as of March 31, 2009 and the company is well positioned to be a buyer in this market. According to its latest quarterly report: “Management is monitoring economic conditions and business events in the United States and Canada closely to identify acquisition opportunities that can benefit Glacier. It is expected that the recession will create distressed conditions that should offer a variety of attractive opportunities.”
Black Press
Black Press, a private company that is controlled by David Black from Victoria and is 20 per cent owned by Torstar, publishes 17 community papers in the Lower Mainland, 18 on Vancouver Island and 36 in the rest of B.C. It also owns the Honolulu Star Bulletin, Ohio’s Akron Beacon Journal, the Red Deer Advocate in Alberta and Sound Publishing, which prints 56 community newspapers in Washington State. Local 2000 represents many Black Press employees in B.C.
The company has expanded aggressively over the past decade. It bought the Honolulu daily in 2000 for $1 and the Akron paper for $165 million US in 2006. In 2007 Black Press tried to buy Osprey Media for $405-million, but was eventually outbid by Quebecor Media.
Because it is not publicly traded, we have very little financial data on the company. What we do know is that Torstar paid $20 million in 2002 for a 20 per cent stake in Black Press. This year the owner of the Toronto Star wrote down its investment to zero. In May of this year Standard and Poor’s downgraded Black Press debt. It said investors could expect recovery of 30-50% in the event of a default.
Recent Comments