Charlesbank Carves NAM from News Corp

News Corp has agreed to sell its News America Marketing business (NAM) to Charlesbank Capital Partners for $235 million.

The consideration for this transaction is comprised of $50 million in cash at closing and deferred cash payments totaling between $125 million and $185 million over the next five years, depending on the timing of such payments. In addition to the cash consideration, News Corp will receive a 5% equity interest in NAM at closing and a warrant to purchase an additional 10% over the next five years.

NAM is a provider of marketing media products that influence the purchasing decisions of online and offline shoppers across the US and Canada. NAM’s products are available through multiple distribution channels, including print publications, in-store and online coupons, primarily under the SmartSource brand name and through the Checkout 51 mobile application.

The company’s SmartSource Magazine is published 44 times a year and inserted into newspapers and other publications, with a circulation of 57 million. NAM’s in-store media options are present in over 60,000 stores. NAM is headquartered in New York City and has a sales force of more than 300 people in 12 offices across the US and Canada.

“When NAM was established, it was dependent on the distribution of coupons via newspaper inserts, but, in recent years, the in-store and digital segments have expanded substantially. The continued strong performance of supermarkets and consumer goods, both core clients of NAM, suggests that the company will have a successful future under its new ownership,” said News Corp CEO Robert Thomson.

“We are excited to be acquiring NAM and look forward to working with the management team, employees and partners to further build this business and significant brand,” said Brandon White, a managing director at Charlesbank. “We are committed to investing the resources required to enhance NAM’s growth, including installing Bill Redmond as CEO of NAM after the transaction closes.”

Mr. Redmond is an experienced senior executive and has been CEO, director and advisor at over twenty public and private companies. Most recently he was the president and CEO of Innocor, one of the largest manufacturers of polyurethane foam products in North America and a portfolio company of One Rock Capital Partners and Bain Capital Private Equity. Earlier in his career, Mr. Redmond held senior positions with Procter & Gamble, PepsiCo and Quaker Oats.

Charlesbank invests in management-led buyouts and growth capital financings in companies with enterprise values of $150 million to $1.5 billion. Sectors of interest include consumer, industrial, industrial services and distribution, TMT and business services. In October 2017, the firm held a final closing of Charlesbank Equity Fund IX LP at its hard cap of $2.75 billion. The firm has offices in Boston and New York City.

The sale of NAM follows a strategic review by News Corp as it looks to optimize its portfolio and simplify the structure of the company. “After evaluating the strategic options, our board has determined that the sale of NAM to Charlesbank is the best course of action to enhance shareholder value and to simplify the structure of News Corp. We expect that the transaction will enable us to highlight the value of our other properties, including Dow Jones,” added Mr. Thomson.

News Corp (Nasdaq: NWS) is a media and information services company headquartered in New York City.

Allen & Company was the financial advisor to News Corp. and RBC Capital Markets advised Charlesbank.

The acquisition of NAM by Charlesbank is expected to close in the fourth quarter of 2020.

© 2020 Private Equity Professional | April 1, 2020

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