Courtside Acquisition Corp. to Acquire American Community Newspapers LLC
Thursday January 25, 2:00 pm ET
NEW YORK--(BUSINESS WIRE)--January 24, 2007:
Courtside Acquisition Corp. ("Courtside") (AMEX: CRB - News), a specified purpose acquisition company, today announced that it has signed a definitive asset purchase agreement with American Community Newspapers LLC ("ACN").
Pursuant to the agreement, Courtside will acquire substantially all of the assets of ACN for $165.0 million. Courtside will also pay up to an additional $15 million in cash if newspaper cash flow for 2008 ranges from $19 million (at which level the contingent payment is $1 million) to $21 million or greater (at which level the contingent payment will be $15 million). In addition, if the Courtside stock price exceeds $8.50 per share for a specified period before July 7, 2009, ACN will receive an additional payment of $10 million. Following the closing of the transaction, expected in the second quarter of 2007, Courtside will be renamed American Community Newspapers Inc. and its securities are expected to trade on the American Stock Exchange. ACN is currently owned by Spire Capital Partners, L.P., Wachovia Capital Partners and members of ACN's senior management.
ACN is a group of 73 publications, comprised of 60 weekly suburban newspapers, three daily newspapers and 10 niche publications, and operates in three highly attractive U.S. markets: Minneapolis - St Paul, Dallas - Ft. Worth and suburban Washington DC - Northern Virginia. ACN's award winning group of publications reaches approximately 875,000 households in the suburban communities surrounding these major cities and enjoys market leading circulation penetration in each of its markets. ACN is focused on providing high quality, local editorial content to its readers and targeted advertising packages to local and national advertisers.
For the fiscal year ended December 31, 2006 (pro forma unaudited), ACN generated revenue of approximately $53.5 million and Newspaper Cash Flow and Adjusted EBITDA of approximately $14.4 million and $12.9 million respectively. ACN experienced a compounded annual growth rate in revenue and Adjusted EBITDA from 2004 to fiscal 2006 of 7.1% and 20.6%, respectively.
Following the closing of the transaction, Gene Carr will become the Chief Executive Officer and Chairman of the Board of Courtside. Dan Wilson will become Chief Financial Officer and Jeff Coolman will be the Vice President of Sales and Minneapolis Group Publisher of Courtside, holding the same positions they currently hold for ACN.
Gene Carr commented, "We are privileged to be able to continue our outstanding journalism and the commitment that we have in serving the needs of our readers, advertisers and other community constituents. ACN's dedicated staff of newspaper professionals has continued to produce award-winning newspapers and is widely recognized in the industry as one of the best at what they do in the suburban newspaper industry. The proposed transaction is a great opportunity for our staff and management. During the past 20 months, ACN has purchased four different newspaper groups and successfully launched new media operations in all of our markets. The new ownership structure in the public markets afford us increased resources and the ability to grow American Community Newspapers even faster by launching new newspapers in all three existing metro areas, to acquire other suburban newspapers in each market, as well as the ability to acquire or build similar suburban newspaper groups in other Top 50 markets in the U.S."
Messrs. Richard Goldstein and Bruce Greenwald, Chairman and President, respectively, of Courtside, noted, "Courtside was targeting a business combination in the entertainment, media and communications industries, which would serve as a growth platform. ACN is an ideal choice. It has outstanding assets, a strong record of revenue, newspaper cash flow and EBITDA growth, and in our view, the best management team in the industry, led by Gene Carr, Dan Wilson and Jeff Coolman. All three of these key executives have agreed to long term employment agreements with Gene becoming Chairman of our Board. We are confident in this team's ability to grow this already outstanding business. We fully expect that the combined resources of ACN's asset base and management's proven track record of performance will enable continued EBITDA and Newspaper Cash Flow growth in at least the mid teens."
The acquisition will be financed by Courtside's cash on hand, including approximately $77.0 million held in trust for the exclusive use of effectuating our business combination, and acquisition financing in excess of $100 million for which commitments have been received from BMO Capital Markets, acting as Sole Book Runner and Lead Arranger.
BMO Capital Markets served as principal financial advisor to Courtside in the transaction.
Courtside has received an opinion from Capitalink L.C., an independent investment banking firm, that the purchase price is fair, from a financial point of view, to Courtside's shareholders. The transaction is subject to Courtside's receiving stockholder approval of the transaction and customary closing conditions, including receipt of ACN's 2006 audited financial statements. The transaction is expected to close in the second quarter of 2007.
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