Lee Enterprises to Acquire Pulitzer Inc. for 3.27 Times Revenue

Weekly Corporate Growth Report, Feb 7, 2005

The Deal: Lee Enterprises has agreed to purchase Pulitzer Inc. for $64 per share, or about $1.4 billion, in cash. Lee will receive cash and marketable securities from Pulitzer valued at $290 million. Lee will also assume $306 million in debt. The companies expect the transaction to close in the second quarter of 2005.

Discussion: Pulitzer Inc. operates 14 daily newspapers and more than 100 weekly newspapers, shoppers, and niche publications. Pulitzer also operates Web sites affiliated with its publications.

Lee Enterprises operates 44 daily newspapers in 19 states and owns or has interests in 200 weekly newspapers, shoppers, and specialty publications. Lee also owns 50 percent of Madison Newspapers, publisher of the Wisconsin State Journal and The Capital Times, and 81 percent of online newspaper services company INN Partners.

The acquisition of Pulitzer will make Lee the fourth-largest owner of daily newspapers in the United States, with 58 daily papers in 23 states. The combined company will rank seventh in overall newspaper circulation, with a circulation of 1.7 million daily and 2 million on Sundays. Lee's chief executive, Mary Junck stated, "The acquisition of Pulitzer allows us to take an exciting and logical next step into another exceptionally attractive group of markets, exactly the kind where we excel as an industry leader in building revenue and circulation."