Explaining Southern California's economy

Orange Country Register sale to Boston-area investor closes


The Orange Country Register's parent company, Freedom Communications, has been officially acquired by 2100 Trust LLC, headed by Massachusetts businessman Aaron Kushner.

The last pieces of Freedom Communications, including the Orange Country Register, have been sold to 2100 Trust LLC, an investment group led by Aaron Kushner, a Boston-area business man who initiated the purchase last month.

I took a stab at figuring out how big a deal this was, but no confirmation of my back-of-the-envelope math is forthcoming, as the deal size wasn't disclosed by Freedom or Kusher's group. The OCR's Mary Ann Mibourn did confirm an aspect of the purchase:

As part of the deal, Freedom Communications will make an additional one-time contribution to the company's retirement plan. The amount of the contribution was not disclosed.

This contribution was reportedly a dealbreaker for U-T San Diego owners Doug Manchester's ambitions to own two papers in Southern California. It could be a significant amount of money, beyond what 2100 Trust paid for the remnants of Freedom. As I wrote last month:


Retirement fund, financing make OC Register sale more complex


The Orange Country Register's parent company, Freedom Communications, has been acquired by a Massachusetts investment group.

Last week, an investor group called 2100 Trust LLC announced that it was acquiring the remaining assets of Freedom Communications, consisting of the Orange Country Register and six other papers, the largest of which is the Colorado Springs Gazette. The terms of the deal haven't been disclosed, but I took a stab at figuring out how much greeting-card mogul Aaron Kushner and his team of investors at 2100 Trust are bringing to the transaction.

My number is $156 million.

I also broke down the financing, which on its face doesn't look all that risky.

But there are some wrinkles to this deal. 

First, the LA Times reported, based on unnamed sources at the O.C. Register, that Kushner and his investors plan to "spin off" the six smaller papers. They intend to use the proceeds from these sales to finance the OCR purchase. By my math, assuming no premiums — extra cash — added to the deals, 2100 Trust could garner $44.5 million from these sales. That would get them more than halfway to buying the OCR, which I have priced at about $111 million, including a $40-million premium — a "Manchester premium," given that Doug Manchester probably overpaid by at least that much to buy the San Diego U-T.