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

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TORONTO – Postmedia Network Canada Corp. (“Postmedia” or the “Company”) announced today 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”). The proposed acquisition includes BNI’s daily and weekly newspapers, digital offerings and parcel delivery business for consideration of $7.5 million in cash and $8.6 million in Postmedia variable voting stock at an implied price of 2, $10 per variable voting share (subject to working capital adjustment). ).

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The proposed transaction includes BNI’s proprietary distribution software that supports the parcel delivery business. Also New Brunswick dailies and weeklies – 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 – will be there Join the Postmedia network of media objects.

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

Upon completion of the acquisition, Postmedia and JDI will enter into an investor rights agreement that includes standstill and voting rights agreements. Postmedia and JDI will also enter into a Conversion Restriction Agreement that will prevent JDI from converting its Postmedia Voting Shares into Voting Shares, subject to certain exceptions.

“Postmedia believes that BNI’s operations in Eastern Canada are highly complementary to our existing business and align strongly with our strategic priorities,” said Andrew MacLeod, Postmedia’s president and chief executive officer. “These titles have a proud history of providing journalism excellence throughout New Brunswick and we look forward to continuing that legacy. The addition of BNI brands allows Postmedia to serve audiences and marketers from the Pacific to the Atlantic as we continue to build a 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 expansion

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

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In connection with the extension, Postmedia will repay approximately $15 million of the principal amount of the Senior Notes and holders of the Senior Notes will receive 794,630 Postmedia shares with variable voting rights, subject to certain restrictions on conversion into voting shares. The issuance of Postmedia Shares and the extension of the maturity of the First Lien Notes and Second Lien Notes are subject to customary closing conditions, including TSX approval and, in the event of an 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 written shareholder consent. However, should approval not be obtained through written consents, it is currently assumed that approval will be obtained at a shareholders’ meeting.

advisor

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

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 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 exciting content to millions of people every week, whenever and wherever they want. This exceptional content, reach and scale provide advertisers and marketers with compelling solutions to effectively reach audiences. Visit www.postmedia.com for more information.

Forward-Looking Information
This press release contains certain information that is “forward-looking information” regarding anticipated future events, results, circumstances, performance or expectations regarding the Company and its business. Forward-looking information includes statements that are forward-looking in nature, dependent on future events, trends, prospects or conditions, or words such as “believe,” “expect,” “intend,” “estimate,” “anticipate,” “may.” ‘, ‘will’, ‘could’, ‘would’, ‘should’ and similar expressions and derivatives thereof. Forward-looking statements in this press release include, but are not limited to, statements relating to the completion of the acquisition of BNI, the acquisition of BNI and the expected benefits to Postmedia, including potential synergies, and the extension of the maturities of the First and Second Pfandbriefe. Such 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 TSX approval and shareholder approval under the rules of the TSX) and the completion of the acquisition of BNI; the realization of potential synergies related to the integration of BNI’s operations with Postmedia’s operations; and the completion of the extension of the maturities of the First Lien Notes and Second Lien Notes. Forward-looking information is based on underlying assumptions and beliefs, estimates and opinions of management and is subject to inherent risks and uncertainties (many of which are beyond Postmedia’s control) regarding future expectations generally, which could cause the actual results of plans, goals and deviate estimates. These risks and uncertainties include, among others: the possibility that the proposed transaction and/or the proposed renewal of the Notes will not close (including without limitation the failure to obtain regulatory approvals or to satisfy any applicable closing conditions) and the Risks related to the potential failure to realize anticipated synergies in integrating BNI’s business into Postmedia’s business, as well as the various risk factors described in the “Risk Factors” section of our annual management discussion and analysis for the financial years, which ended on August 31, 2021, 2020 and 2019. Although the company bases such information and statements on assumptions that were believed to be reasonable at the time they were prepared, they are not guarantees of future performance and actual results of business operations, financial condition and liquidity and developments in the industry in which the company operates, may differ materially from such information and statements contained in this press release. Given these risks and uncertainties, undue reliance should not be placed on any forward-looking information or forward-looking statements, which speak only as of the date of such information or statements. Except as required by law, the Company undertakes no obligation and expressly disclaims any obligation to update any such information or statements or to publicly announce the results of any revisions to such information or statements.

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

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contacts

media contact
Phyllise Gelland
Vice President, Communications
(647) 273-9287
[email protected]

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

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