Postmedia to Acquire Brunswick News Inc.

Postmedia Network Canada Corp. has announced it has entered into a definitive agreement with J. D. Irving, Limited to purchase all of the issued and outstanding shares of Brunswick News Inc. The proposed acquisition includes BNI’s daily and weekly newspapers, digital properties and parcel delivery business in exchange for consideration of $7.5M in cash and $8.6M in variable voting shares of Postmedia at an implied price of $2.10 per variable voting share (subject to working capital adjustment).

The proposed transaction includes BNI’s proprietary distribution software powering its parcel delivery business. New Brunswick daily and weekly newspapers – including the Telegraph-Journal, Times Globe, Times & Transcript, The Daily Gleaner, Miramichi Leader, Woodstock Bugle-Observer, Bathurst Northern Light, Kings County Record, The Campbellton Tribune and The Victoria Star – will also join the Postmedia network of media properties.

“We are pleased that Postmedia, one of Canada’s largest media organizations, will acquire all of our newspapers and media products through the purchase of Brunswick News, which represents an exit from the media business by J.D. Irving, Limited. Postmedia is well positioned to make the transition to the digital world of providing New Brunswickers with a reliable source of local, regional and national news as well as access to much broader news coverage,” said Jim Irving, Co-CEO of J.D. Irving, Limited.

Upon the closing of the acquisition, Postmedia and JDI will enter into an investor rights agreement which will include standstill and voting covenants. Postmedia and JDI will also enter into a conversion restriction agreement pursuant to which JDI will be restricted from converting its variable voting shares of Postmedia into voting shares, subject to certain exceptions.

“Postmedia believes that BNI’s Eastern Canada operations are highly complementary to our existing business and strongly align with our strategic priorities,” said Andrew MacLeod, President and Chief Executive Officer, Postmedia. “These titles have a proud history of providing excellent journalism across New Brunswick and we look forward to continuing that legacy. The addition of BNI brands allows Postmedia to serve audiences and marketers from the Pacific to the Atlantic while we continue to build out a national distribution platform and network for our parcel delivery business.”

The proposed transaction is subject to various closing conditions, including approval of the Toronto Stock Exchange.

Financing Extension

Postmedia also announced that it has entered into definitive agreements, subject to customary closing conditions, providing for an extension of the maturity of its first lien notes and second lien notes (collectively, the “Notes”) by approximately three and a half years to February 17, 2027 and August 17, 2027, respectively on substantially similar terms to the existing terms including interest rates and extended the maturity of its asset-based revolving credit facility (“ABL Facility”) by three years to October 1, 2025. “These extensions demonstrate a vote of confidence from our key stakeholders and give us a longer runway for our digital transformation,” said Mr. MacLeod.

In connection with the extension, Postmedia will repay approximately $15 million of principal amount of the first lien notes and holders of the first lien notes will receive 794,630 variable voting shares of Postmedia, which shares will be subject to certain restrictions on conversion into voting shares. The issuance of Postmedia shares and the extension of the maturity of the first lien notes and second lien notes will be subject to customary closing conditions, including approval of the TSX and, in the case of the extension of the maturity of the second lien notes, shareholder approval under the rules of the TSX. It is currently anticipated that such shareholder approval will be obtained through written shareholder consents. However, if approval is not obtained through written consents, it is currently expected that the approval will be sought by way of a shareholders meeting.

About Postmedia Network Canada Corp.

Postmedia Network Canada Corp. is the holding company that owns Postmedia Network Inc., a Canadian newsmedia company representing more than 120 brands across multiple print, online, and mobile platforms. Award-winning journalists and innovative product development teams bring engaging content to millions of people every week whenever and wherever they want it. For more information, visit www.postmedia.com.