DAVENPORT, Iowa — Lee Enterprises is buying Berkshire Hathaway Media Group’s newspapers, including the Lexington Clipper-Herald, for $140 million in cash, according to a news release today.
In addition to the Clipper-Herald, the acquisition includes the following BH Media Group daily newspapers in Nebraska: Omaha World-Herald, Kearney Hub, Grand Island Independent, Scottsbluff Star-Herald, North Platte Telegraph and York News-Times. The deal includes 29 other BH Media newspapers as well as The Buffalo News.
Lee Enterprises owns a number of other Nebraska newspapers, including the Lincoln Journal Star. Lee now will own and operate 81 daily newspapers, nearly doubling its size from 50.
Berkshire Hathaway will provide approximately $576 million in long-term financing to Lee at a 9 percent annual rate, according to the release. The proceeds will be used to pay for the acquisition, refinancing of Lee’s approximate $400 million of existing debt and provide cash to allow for the termination of Lee’s revolving credit facility, the release said.
BH Media has papers in 10 states, including 30 daily newspapers and 49 weekly publications and 32 other print products.
In June 2018, Lee took over managing all BH Media publications.
Warren Buffett, Berkshire Hathaway’s chairman and CEO, said, “My partner Charlie Munger and I have known and admired the Lee organization for over 40 years. They have delivered exceptional performance managing BH Media’s newspapers and continue to outpace the industry in digital market share and revenue.”
Buffet said Berkshire Hathaway had “zero interest in selling the group to anyone else for one simple reason: We believe that Lee is best positioned to manage through the industry’s challenges. No organization is more committed to serving the vital role of high-quality local news, however delivered, as Lee.”
Lee President and CEO Kevin Mowbray said, “Over the past 18 months, we have developed a strong bond and shared culture with the outstanding operators at BH Media. This highly collaborative relationship has driven digital and subscription revenue growth, margin expansion and continued innovation. We are confident we can achieve even greater success as one, integrated company.”
“This is a compelling and transformative transaction for Lee,” Mary Junck, Lee’s chairman, said in a news release. “We have enjoyed a strong, long-term relationship with Berkshire Hathaway, which has been a significant investor across our capital structure for years. We look forward to capturing the tremendous value of this transaction for readers, advertisers and shareholders.