Industry News

Distinctly Montana Magazine

Distinctly Montana Magazine has been sold by founder Michael Blevins to Bill Muhlenfeld and Anthea George of Bozeman, Montana, according to John Cribb, Cribb, Greene & Associates, who represented the seller in the transaction.

Distinctly Montana Magazine is a high quality glossy product published quarterly and distributed throughout Montana and most of the nation. The magazine, founded in 2001, is a resource guide for all things Montana and includes local features, literary pieces, and high quality art and photography. Included in the sale is the magazine website at distinctlymontana.com.

According to Anthea George, "Distinctly Montana is a quality publication with a great concept and a focused mission. We look forward as new owners to bringing the best of Montana to residents and visitors alike."

Cribb, Greene & Associates is an eighty-seven year old publishing company merger and acquisition firm with offices in Bozeman, Montana and Charlottesville, Virginia.

Current newspaper EBITDA valuation multiples for mid and small market papers at 6x to 7.5x

March 30, 2010

Some recent high profile newspaper sales have created the impression that all newspaper values are in the basement, which is completely incorrect. While EBITDA multiples used to value newspapers are well below those of a few years ago, the multiples have not declined to the level of some distressed sales.

Let's say your neighbor loses his job and is unable to pay his house payment. The house goes into foreclosure and is sold for 50 cents on the dollar compared to expected values. Does this mean that your house is worth half as much? Or to expand that thought, does this mean that every house in the United States is worth half as much? Of course not - that sale came out of a distressed situation, which reduced the selling price. Using a distressed newspaper sale as an example of the value of any and every newspaper is absurd.

Cribb, Greene & Associates has closed seventeen newspaper transactions between 2008 and the present - which is basically the time period of the significant reduction in newspaper values. These transactions include mid and small market daily, twice weekly, and weekly newspapers and clusters.

The average EBITDA valuation multiple in these transactions (excluding four properties that were losing money) was 7.58x. The most recent transactions (2009 to present) had an average EBITDA valuation multiple of 6.05x. The range of multiples of EBITDA in these transactions was 1.5x to 18.3x. Clearly, both the 1.5x transaction and the 18.3x transaction were not typical. Seventy percent (70%) of these transactions were at multiples between 5.5x and 8.6x.

Most of these transactions included some amount of seller financing as conventional bank financing is still difficult to obtain, at least at terms deemed reasonable by newspaper buyers.

No one can predict where newspaper values will go in the longer term, but likely they will inch up and stabilize, particularly as bank financing becomes more available. Newspaper appraisals vary by market and publication, and many factors affect value in addition to the multiple of EBITDA. More distress sales will probably take place in the coming year, but these sales do not set the value of all newspaper properties.

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