SoftBank Group Corp., the Japanese multi-national that also owns Sprint, has purchased Gatehouse Media, including over 500 weekly and daily newspapers. GateHouse is owned by New Media Investment Group, in turn managed by an affiliate of Fortress.
The acquisition will give SoftBank that company's investments in New Media and FHC Property Management LLC, a senior living property management business. SoftBank is known for its investment in the technology industry, including in the robotics and internet sectors.
Purchasing a chain of US weekly and daily newspapers seems out of step for a Japanese bank, but the purchase may in part have been prompted by a meeting President Donald Trump had with the CEO of SoftBank Group Corp., according to a report in the Boston Business Journal.
SoftBank announced the acquisition of the parent company of GateHouse Media, the publishing juggernaut that owns community newspapers including award-winning daily papers like the Worcester Telegram and Gazette, the Cape Cod Times and the Patriot Ledger in Quincy.
Masayoshi Son, the billionaire founder and CEO of SoftBank, pledged to President Trump that his company would invest $50bn and create 50,000 new jobs in the U.S, the article states. The latest move by SoftBank, the outright acquisition this week of private-equity firm Fortress Investment Group for $3.3bn in cash, might be part of that investment promise. The deal is expected to close in the second half of this year.
GateHouse is owned by New Media Investment Group , which is in turn managed by an affiliate of Fortress. The acquisition gives SoftBank that company's investments in New Media and FHC Property Management LLC, a senior living property management business. SoftBank is known for its investment in the technology industry, including in the robotics and internet sectors, the article states.
New Media's portfolio includes 564 community print publications, 489 websites, 476 mobile sites and six yellow page directories across the country. The company — which reported $1.2bn in sales in 2015 — employed 9,509 employees, with about 13% of the workforce represented by 35 unions as of Dec. 27, 2015, according to a regulatory filing.
GateHouse CEO Kirk Davis, who also serves as chief operating officer, told the Boston Business Journal that he didn't anticipate much changing.
"We are focused on continuously improving our business and transformation," he said. "Having said that, I did learn a little about 'Kaizen' working for Fidelity" — referring to the Japanese word for continuous improvement in working practices —"and expressed to my team that if we stay on that track, we should be in good shape, especially considering the pending ownership change."
Fortress' New Media connections run deep. New Media's chief executive officer, Michael E. Reed, and chief financial officer, Gregory W. Freiberg, are both employees of Fortress. Their salaries are both paid by Fortress.
According to SoftBank and Fortress, Fortress founder and chairman Wesley Edens, who is also board chairman at New Media, will be staying on to continue at Fortress. The other two top Fortress executives, Pete Briger and Randy Nardone, will also stay on — with all three potentially reaping a combined $1.39 bn from the deal, according to Bloomberg.
Fortress will operate within SoftBank as an independent business headquartered in New York, the companies said. Fortress had approximately $70.1 bn of assets under management as of Sept. 30, 2016.