Newcastle Investment Corp. (NYSE:NCT) acquires Local Media Group


Dallas, Texas 09/11/2013 (Financialstrend) – Newcastle Investment Corp. (NYSE:NCT) announced the acquisition of the Dow Jones Local Media Group. It has acquired this company from News Corp for an amount of $87 million. NCT made a total equity-investment of $54M. This included all transaction expenses. The remainder of the total purchase price was financed with $33m of debt.

The Local Media Group controls and operates 33 different local publications. These include eight daily and fifteen weekly newspapers across 7 states. Most of these publications have been featuring very important and relevant local content to the communities for more than 75 years.

GateHouse Media, Inc. will be managing the local Media operations. The former is one of the United States’ largest publishers. It publishes locally-based online and print media in the country and has a variety of products in its portfolio that includes more than 400 different community publications and almost 350 related sites. Gatehouse is affiliated to Fortress Investment Group which is Newcastle Investment Corp. (NYSE:NCT)’s manager.

NCT’s GateHouse plan

NCT owns around 52% of GateHouses’ $1.2B of debt. It has also announced that it has entered into a certain agreement with some other creditors. This is related to the potential-restructuring of GateHouse. Newcastle is expecting to convert the debt position it has into some GateHouse equity. The other creditors will still have the option of converting their positions into cash or equity at a 40% price of par.

Tuesdays’ trading

In Tuesday’s trading, Newcastle Investment Corp. (NYSE:NCT) stock dropped by 0.68%. The opening price of the shares was $5.94 which rose to an intraday high of $5.94 and closed at $5.86. Approximately 2.94 million NCT shares were traded on Tuesday which was below the average volume of 4.10 million shares that were traded over a 30 day period. The company had a market capitalization of $1.72 billion.