Editor’s note: These are the two memos that employees of GateHouse Media (top) and Gannett (below) were emailed on Monday. For more context about the merger, read: The GateHouse takeover of Gannett has been finalized.
TO: All GateHouse Media/BridgeTower Media Employees
FROM: Mike Reed and Kirk Davis
DATE: August 5, 2019
SUBJECT: New Media acquisition of GannettWe are excited to announce today that New Media Investment Group Inc., the public company parent of GateHouse Media, has signed an agreement to purchase Gannett, Co., Inc. Following closing, both the public and operating companies will be called Gannett. Mike Reed will serve as Chairman and CEO of the combined public company. Prior to closing, Kirk Davis will continue as COO of New Media and CEO of GateHouse, and will work closely with Mike to create the management and integration plan for the combined company as we work to seek regulatory approvals and close the transaction. Gannett’s newly named CEO, Paul Bascobert, will become CEO of the operating company upon closing.
We are incredibly proud of this team’s commitment to high-quality journalism and community leadership; this mission will remain at our core. The Gannett acquisition positions us as the leader in community journalism in the United States. In addition, we believe that together, we are well-positioned to address the profound changes our industry has faced in media consumption habits and advertising spend.
Gannett brings a long and storied history of creating award-winning content across its more than 100 local brands, including The Arizona Republic, the Detroit Free Press, and the Milwaukee Journal Sentinel. Like GateHouse, Gannett is committed to journalism with impact; its news teams have recently been recognized nationally with prestigious George Polk and Scripps Howard awards, as well as several Edward R. Murrow awards for broadcast and digital journalism. In 2018, Gannett received three Pulitzers – for explanatory journalism, local reporting and editorial writing. USA TODAY, the company’s national news brand, has been an industry innovator since its 1982 launch. Together, the company’s local and national brands reach more than 125M readers across digital platforms each month.
The combined scale of our trusted brands creates a major national platform; our company will become a top five digital media player, as measured by ComScore. And, we will have access to the revenue diversification investments and best practices of each company to accelerate our transition to a sustainable product and revenue model. As examples, the combined strength of the ReachLocal, Wordstream and UpCurve technology and Google relationships will solidify our position as a significant SMB partner, affording opportunities for education, support and further growth. GateHouse Live will be able to accelerate its growth through the combined company’s expanded market reach and Gannett, named one of the most innovative companies in AR/VR by Fast Company, can share its expertise with us.
This transaction is subject to regulatory review, which we anticipate will take several months. While there are legal restrictions on what we can plan for and discuss during this period, we will do our best to provide you with regular updates on the process.
Shortly, you will receive an invitation to an all-employee call for later today, August 5th, at 1pm ET. We hope you will join us!
We are excited to leverage the combined strength and resources of GateHouse and Gannett!
Thanks,
Mike & Kirk
This is the memo that went out to Gannett employees:
Dear Colleagues,
Today we made two significant announcements for the future of our company.
First, together with our second quarter 2019 financial results, we announced an agreement under which New Media will acquire Gannett. Following the close of the transaction, both New Media and its operating subsidiary GateHouse will be rebranded and operate under the “Gannett” brand. The combined company will be headquartered in McLean, Va., with a continued corporate presence in existing locations.
Current New Media Chairman and Chief Executive Officer Michael Reed will remain Chairman and CEO of the public company. Our own Chief Financial Officer Ali Engel is expected to become CFO of the public company upon closing.
We are confident that this transaction will create tremendous value for both Gannett and New Media shareholders, yield benefits for our audiences, clients, communities and, importantly, lead to significant opportunities for Gannett employees as part of an expanded, better-resourced organization.
Second, in a separate press release, we announced the appointment of Paul Bascobert as President and Chief Executive Officer of Gannett and as a member of the Board of Directors, effective immediately. Copies of the press releases we issued are attached.
Transaction with New Media: A Strong Partner to Drive Growth in the Digital Future
The transaction with New Media represents an exciting new chapter for Gannett. Like Gannett, GateHouse is one of the largest publishers of locally based print and online media in the United States. Together, we will create the largest U.S. local news organization by number of titles and circulation and create a leading digital media player, with 263 daily publications across 47 states and Guam and USA TODAY, reaching more than 145 million unique visitors every month, in addition to Newsquest. We see significant opportunities to leverage the combined company’s enhanced scale and financial strength to accelerate our ongoing digital transformation and drive growth. And importantly, we will have an expansive journalism network of national and local reporters with the resources required to deliver unique and award-winning content for local communities and national audiences.
New Media recognizes our journalistic excellence, admires the sophistication and quality of our people and appreciates the continued progress we have made in our digital transformation. Importantly, Gannett and New Media share many of the same values, including trust, integrity and a focus on providing impactful journalism to the communities we serve. Our companies also share the same strategic vision that a digital transformation of the newspaper industry is vital to preserve the future of journalism.
The new combined company represents a significant expansion of the USA TODAY NETWORK, adding such award-winning brands as the Austin American-Statesman, The Columbus Dispatch and the Providence Journal.
Our key acquisitions, including ReachLocal, SweetIQ and WordStream, have driven innovation and made Gannett a leader in providing advertising and marketing solutions. With the addition of New Media’s UpCurve and GatehouseLive, this transaction will position our company as THE trusted digital marketing partner to local and national businesses.
As we worked with New Media on the key elements of this planned merger, our discussions centered on the commitments that have earned us the trust of the communities we serve. The combined operating company will be guided by a focus on high-quality journalism, our ongoing digital transformation and strong corporate governance. Importantly, New Media will also be expanding its Board to include three Gannett directors and, as noted above, the combined company will retain the Gannett name and headquarters. We should be proud of New Media’s strong interest in our brands and our team’s outstanding work.
In short, we have found in New Media a strong partner and cultural fit for Gannett as we come together with a shared mission to create the nation’s largest local media organization and best-in-class marketing solutions partner.
Please keep in mind that today’s announcement is just the first step. The transaction is expected to close by the end of 2019, subject to the satisfaction of customary closing conditions, including receipt of regulatory clearances and approval by the shareholders of each company. Until then, we will continue to operate as separate companies, and it will remain business as usual for all of us at Gannett.
Your Board and management team are deeply grateful for your dedication and focus throughout countless external distractions. Your contributions and care for our clients, communities and each other make a positive difference every day. And you have our sincere thanks as we continue to serve those who depend on us.
A New Leader for Gannett
Secondly, we are excited to welcome Paul as our new CEO.
Paul is a proven leader with a clear strategic vision and established record of driving financial and operational performance for multiple marketing solutions companies and media brands. We think he is uniquely suited to lead Gannett going forward, and I am confident the entire organization will benefit from his experience and insights as we work to close the transaction with New Media. Upon closing, Paul will serve as Chief Executive Officer of the combined operating company.
Most recently, Paul served as President of XO Group, where he was instrumental to the company’s transformation from a media business to a two-sided marketplace model. Previously, he served as President of Local Businesses at Yodle, a local internet marketing and advertising solutions provider for small businesses. Prior to that, he held leadership roles at multiple media companies, including Bloomberg LP, where he served as Chief Operating Officer of its Media Group and President of Bloomberg Businessweek, and Dow Jones & Co., where he served as Chief Marketing Officer across its consumer products, including The Wall Street Journal, Barron’s and MarketWatch.
With his appointment, members of the Gannett executive team will report directly to Paul. I want to thank Barbara Wall, who has served as interim Chief Operating Officer in addition to Chief Legal Officer following Bob Dickey’s retirement in May. This was a critical period for the company, and Barbara’s deep understanding of our business and operations from her more than three decades at Gannett will continue to be invaluable.
Next Steps
We understand that there will be many questions. Keep in mind that this transaction is subject to regulatory review, which we anticipate will take several months. While there are legal restrictions on what we can plan for and discuss during this period, we will do our best to provide you with regular updates on the process.
At 5:30 p.m. Eastern Time today, Paul, Barbara and I, together with the rest of your management team, will be hosting an employee town hall to discuss these announcements in greater detail and answer your questions. I know Paul is looking forward to sharing his enthusiasm for today’s news and meeting many of you in the coming weeks. For those of you at our headquarters, the event will be held in the auditorium. It can also be watched via webcast. Look out for an invite.
In the interim, attached please find an FAQ to help answer some of your immediate questions.
As always, if you receive any inquiries from the media about today’s news, please refer them to Amber Allman, vice president of corporate communications, at 703-854-5358. Inquiries from analysts or investors should be referred to Stacy Cunningham, vice president of financial planning and investor relations, at investors@gannett.comor 703-854-3168.
On behalf of the board of directors and leadership team, thank you for your continued support and dedication to Gannett. I hope you share my optimism for our company’s future.
Sincerely,
Jeff Louis
Chairman, Gannett Board of Directors
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