HM Capital Buys Portland Press Herald
The Dallas, Texas-based firm is betting on the turnaround efforts of newspaper veteran Richard Connor.
June 16, 2009
As newspapers continue to struggle for their survival, a private equity firm in Dallas, Texas believes the ailing media sector can become a profitable investment.
HM Capital, the investment firm formerly known as Hicks, Muse & Co., bought the Portland Press Herald and assets of the Seattle Times Company for an undisclosed amount.
The firm is partnering with Richard L. Connor, the editor and publisher of Times Leader, a Northeastern Pennsylvania newspaper, and president of Wilkes-Barre Publishing Company, the newspaper’s parent company. Wilkes-Barre Publishing was acquired by HM Capital in 2006.
The assets, which include the Portland Press Herald, the Kennebec Journal, the Waterville Sentinel, the Coastal Journal and MaineToday.com, and four office buildings and two printing presses, were sold to a newly-formed company, MaineToday Media, Inc. According to the firm, union contracts were re-negotiated that would give employees a stake in the new company.
Private equity firms have invested in the newspaper industry to mixed results. In March, Platinum Equity purchased The San Diego Union-Tribune from The Copley Press in a transaction that reportedly a “very low” price, according to The New York Times.
Other private equity newspaper buys include Avista Capital Partners’ $100 million stake in the Star Tribune. The New York-based firm took a 75% write-down on its December 2006 investment into Minneapolis-St. Paul newspaper. The newspaper filed for bankruptcy in January 2009.
In April 2007, real estate investor Sam Zell bought Chicago’s Tribune Co., only to see the company file for bankruptcy in December 2008.
In May, investor Warren Buffet responded to a question about the outlook of the newspaper industry by saying he “would not buy them at any price.” He said, “They have the possibility of going to just unending losses.”
HM Capital was founded by Tom Hicks and John Muse in 1989 as Hicks Muse. Tom Hicks resigned from the firm in 2004 and later founded Hicks Holdings LLC. John Muse departed the firm in 2005 to become non-executive director of the European arm, Lion Capital LLP, which separated in the same year.
Calls placed to HM Capital were not returned by press time.
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