JPIMedia sold to David Montgomery-led venture National World for £10.2m

JPIMedia has been sold to National World, the company set up by former Local World boss David Montgomery.

Staff at JPIMedia have been notified of the sale, which will be completed at midnight on January 2, by email today.

Details posted on the National World website say the acquisition cost is £10.2m, with £5.2m paid as the sale goes through, with the remainder paid in future years.

A £6.5m capital fund will be provided by National World to JPI once the deal goes through.

National World also said Mark Hollinshead, former chief operating officer at Trinity Mirror, will become Chief Commercial Officer, from tomorrow.

An email from CEO David King, said “I am now able to update you on the sale process of our regional publishing business.

“I can confirm that today, 31st December 2020, National World plc has agreed to acquire JPIMedia Publishing Ltd and its subsidiaries. It will take ownership of the business at midnight on the 2nd January 2021.

“Terms and conditions of employment of staff are not affected by the sale.

“As I have previously said, it is the nature of these processes that they are conducted confidentially, and despite speculation and rumour it has not been possible to provide you with any details on progress until this point.

“I would like to thank all of you for the exceptional commitment and passion you show every day and I believe that our titles, staff, audiences and other stakeholders can now benefit from being part of this new organisation.

“Over the last two years, we have made great progress with our digital strategy, changing the way we work, how we serve our audiences, diversifying our revenue streams and supporting our advertising customers. While 2020 has been a very difficult year, over the coming months we must continue to build on the momentum that you have created.

“The publishing industry is undergoing a fundamental shift and being part of National World will help sustain our business and local media for the longer term.”

The sale closes the chapter on a difficult two years for JPIMedia, which began when Johnston Press was placed into administration in November 2018. Bondholders in JP, including Goldentree Asset Management, subsequently took control of the business, as JPIMedia.

At the time, administrators said a £150m bid had been tabled for JPIMedia, which then included national newspaper the i. Several other bids were received for specific titles, but directors felt the pre-pack sale was the best route forward for the business.

Through much of 2019 there was speculation that other publishers, such as Reach or Newsquest, might buy JPIMedia, but the only sale to be confirmed was that of the i, to Daily Mail owner DMGT.

JPI then said it had stopped looking as sale options for the regional business in February, before re-starting the process later in the year.

For David Montgomery, it is the second time he has led the purchase of a large regional publisher. He formed Local World by acquiring Northcliffe — the regional arm of the Daily Mail group — and Iliffe publications in 2012.

Reach, then Trinity Mirror, took a 20% in the business before buying it outright in 2015 and folding it into its regional division. Since then, he has been chairman at Local TV, which runs a number of city-based local TV stations across the country.

National World chairman David Montgomery said: “National World is a public company set up to invest in and develop local publishing to create a modern sustainable model.

“We are very proud to be associated with JPIMedia’s 100 historic brands and recognise the dedication of all the staff who serve their communities in print and online, particularly in current challenging times.

“National World is committed to growing the company through the enhancement of content and technology and we look forward to discussing these plans with everyone and, once possible, visiting all locations.

“On a personal note I have been associated with some JPIMedia titles since I was a student journalist and witnessed over decades how their great and honest reporting has contributed to democratic and societal development — a tradition that National World will continue to champion.”

Full staff briefings will begin on January 4.

The National World website positions the company as planning to repeat the merger strategy of Local World to deliver value for shareholders and investors, referencing bringing together more businesses, and potentially more diverse ones too.

On its website, National World said: “Local World published over 100 UK regional newspaper titles and associated websites, with a strategy of maximising content, digital and advertising synergies between historically independent businesses.

“The company was sold in November 2015 to Reach plc (the owner of Trinity Mirror plc) and delivered a total return to its investors of approximately four times their original investment.

“National World intends to apply the Local World strategy on a national scale and to a wider range of media assets. The Company will seek to acquire both historic and more recent news brands together with the technology to change the business model for print and digital news publishing with the dual objectives of combining continued cost reduction with sustained online revenue growth.”