Johnston Press to sell 13 titles to Iliffe

Johnston Press has announced the proposed disposal of 13 publishing titles and associated websites in East Anglia and East Midlands to Iliffe Media, for £17 million.

The sale of the 13 titles is in line with the Group's previously stated strategy to focus its business on core titles in selected geographic markets with a view to reducing net debt, says Johnston Press.

According to the company:

Transaction Highlights

* Johnston Publishing East Anglia Limited is to be sold for cash consideration of £17.0 million payable on Completion, subject to adjustment for the apportionment of certain items of income and expenditure relating to the Titles

* The Group is expected to receive net cash proceeds of approximately £16.0 million from the Disposal after deductions, fees and other transaction costs

* The consideration of £17.0 million represents a 5.3x multiple of operating profit of £3.2 million before exceptional expenses for the 52 weeks ended 2 January 2016

Transaction Rationale

* The Disposal progresses plans to focus Johnston Press’ business on its selected geographic markets, audience profile and digital growth

* The net proceeds from the Disposal will reduce the Group’s net debt and will be used for general corporate purposes in line with the Group’s strategy

Ashley Highfield, Chief Executive of Johnston Press plc said: “This disposal marks a major milestone in our divestment strategy and puts us firmly on the path of refocusing our activities on areas with the greatest growth potential. The Disposal will also reduce our net debt whilst putting us on a stronger footing. I would like to thank the staff based at these Titles for their hard work and loyalty over the years and we wish them well for a successful future.”

The deal is expected to take place during January 2017, subject to shareholder approval.