The Los Angeles Times has been sold to the biotechnology billionaire Patrick Soon-Shiong by Tronc for $500 million (€405 million).
The deal also includes the San Diego Union-Tribune and a number of smaller regional newspapers. Mr Soon-Shiong, who is also one of Tronc's largest shareholders, will pay $500 million in cash and assume $90 million in pension liabilities. The deal values the papers being sold at eight times ebitda of $73 million in the 12 months ending September 30th, 2017.
Tronc, which also owns the Chicago Tribune and the New York Daily News, will use the funds to pay outstanding debt and lower pension liabilities.
"We will have a versatile balance sheet that will enable us to be even more aggressive in executing on our growth strategy as a leading player in news and digital media. We have a pipeline of robust opportunities and M&A will continue to be a significant part of our future," said Justin Dearborn, chief executive.
Escalating turmoil
The sale follows months of escalating turmoil at the LA Times. It has been hammered by declining advertising and circulation revenue and difficulties building a digital business, and has undergone several rounds of cuts in recent years.
Mr Soon-Shiong is a surgeon who became a billionaire after selling Abraxane, a multibillion-dollar drug he invented, to Celgene in 2010. He is also a minority owner of the Los Angeles Lakers basketball team.
– Copyright The Financial Times Limited 2018
