David Montgomery’s investment vehicle National World Plc has agreed to buy the UK’s third-largest local newspaper group JPI Media for £10.2m.
The sale price is a tiny fraction of what JPI Media was formerly worth (in its previous guise as Johnston Press).
In 2005 Scotsman Publications alone (a fraction of the existing JPI Media portfolio) was bought by Johnston Press for £160m.
JPI Media has been owned by its creditors since they bought Johnston Press out of administration and created the company in 2018.
In accounts for the period September 2018 to January 2020, JPI Media turned over £146m and paid back £65m of the £100m owed to the bond holders who became the company’s owners.
JPI Media sold the i newspaper to DMGT for £49.4m in November 2018.
Millions rely on JPI Media’s network of nearly 200 titles for their local news. Its leading publications include The Scotsman, Yorkshire Post, Sunderland Echo and Portsmouth’s The News.
The purchase of JPI Media fulfils Montgomery’s stated aim with National World Plc to acquire established news bands and “modernise” them.
The strategy set out by National World includes:
- “jettisoning legacy systems and archaic industrial practices
- “combining acquired digital technology innovation and traditional print assets in a new industry model.”
JPI Media chief executive David King told staff today that terms and conditions of employment are unaffected by the sale.
He said: “I would like to thank all of you for the exceptional commitment and passion you show every day and I believe that our titles, staff, audiences and other stakeholders can now benefit from being part of this new organisation.
“Over the last two years, we have made great progress with our digital strategy, changing the way we work, how we serve our audiences, diversifying our revenue streams and supporting our advertising customers. While 2020 has been a very difficult year, over the coming months we must continue to build on the momentum that you have created.
“The publishing industry is undergoing a fundamental shift and being part of National World will help sustain our business and local media for the longer term.”
He shared the following statement from National World CEO Montgomery: “National World is a public company set up to invest in and develop local publishing to create a modern sustainable model. We are very proud to be associated with JPIMedia’s 100 historic brands and recognise the dedication of all the staff who serve their communities in print and online, particularly in current challenging times.
“National World is committed to growing the company through the enhancement of content and technology and we look forward to discussing these plans with everyone and, once possible, visiting all locations.
“On a personal note I have been associated with some JPIMedia titles since I was a student journalist and witnessed over decades how their great and honest reporting has contributed to democratic and societal development – a tradition that National World will continue to champion.”
Montgomery’s last major local newspaper venture in the UK was as chief executive of Local World, a group created out of the merger of Iliffe News and Media and Northcliffe in 2013. It grew from a valuation of £100m at launch to £220m when it was bought by Trinity Mirror (now Reach plc) in 2015.
Montgomery boasted that investors in Local World quadrupled their money in the space of three years.
National World has funded the acquisition from its own cash resources and by the issue of £8.425 million of loan notes. The loan notes pay interest at 10% and are convertible into shares in National World, subject to certain conditions.