Explaining Southern California's economy

Who is Revolution Capital, and what does it want with the Tampa Tribune?

Kevork Djansezian/AP

The Los Angeles Times building. The sale of a paper in Florida should remind Angelenos that the hometown paper could soon be for sale. Again.

It's the one paper that billionaire investor Warren Buffett didn't want: the Tampa Tribune. Buffett's Berkshire Hathaway made a counterintuitive deal back earlier this year — counterintuitive because observers tend to believe the newspaper business is not very good — shelling out $146 million for pretty much everything else that Tampa Trib owner Media General prints on paper.

Other investors couldn't help but notice Buffett's interest in newspapers. One of them, Boston greeting-card tycoon Aaron Kushner, bought the Orange Country Register and the remaining assets of Freedom Communications, for an as-yet undisclosed sum, in June. 

Now a private-equity firm based in Los Angeles has paid a fire-sale price of $9.5 million for the Tampa Trib. It's been on the losing end of a circulation battle with the Tampa Bay Times (daily circ for the Trib has declined by double digits since 2011). Revolution Capital appears to be something of a spinoff from Platinum Equity, the L.A. shop run by Tom Gores (number 15 on the L.A. Business Journal's ranking of the 50 Wealthiest Angelenos). Revolution's founder and managing director, Robert Loring, labored for a time at Platinum, in the M&A division. 

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Orange Country Register sale to Boston-area investor closes

OCR-Front

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:

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Retirement fund, financing make OC Register sale more complex

OCR-Front

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.

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OC Register sale to 2100 Trust LLC is a full acquisition of Freedom Communications

OCR-Front

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

Freedom Communications Holdings, the parent company of the Orange County Register, has been acquired by a subsidiary of 2100 Trust LLC, a private investment firm based in Masachusetts and led by 39-year-old Aaron Kushner, who has previously attempted to buy the Boston Globe from the New York Times Co. and last year sought to purchase a newspaper company in Maine.

The deal size hasn't yet been disclosed, nor has any detail been released on the financing. The deal is scheduled to close in 30 days and caps a sell-off of media properties in Texas and the Midwest that Freedom has been engaged in for the past few months. Earlier in 2012, Freedom sold papers in Florida, New Mexico, and North Carolina. The O.C. Register is the nation's 19th largest newspaper, and it's recently seen an uptick in its circulation.

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