News Corp Announces Sale of News America Marketing to Charlesbank Capital Partners

News Corp today announced that it has entered into a definitive agreement to sell its News America Marketing business (“NAM”) to Charlesbank Capital Partners, a private equity firm with offices in Boston and New York.

The agreement follows a strategic review of NAM as part of News Corp’s ongoing efforts to optimize its portfolio and simplify the structure of the Company.

Under the terms of the agreement, News Corp will receive cash consideration of up to approximately $235 million, comprised of $50 million in cash upon closing of the transaction and additional deferred cash payments in an aggregate amount of between$125 million and approximately $185 million, depending on the timing of such payments. The deferred consideration is payable on or before the five-year anniversary of closing. Additionally, News Corp has the opportunity to benefit from NAM’s future success through an option to retain up to 15% equity in the business (5% at closing and 10% five-year warrant). The purchase price is subject to customary working capital and other adjustments. Please see News Corp’s Form 8-K to be filed with the Securities and Exchange Commission for more information.

“After evaluating the strategic options, our Board has determined that the sale of NAM to Charlesbank is the best course of action to enhance shareholder value and to simplify the structure of News Corp. We expect that the transaction will enable us to highlight the value of our other properties, including Dow Jones,” said Robert Thomson, Chief Executive of News Corp.

“When NAM was established, it was dependent on the distribution of coupons via newspaper inserts, but, in recent years, the in- store and digital segments have expanded substantially. The continued strong performance of supermarkets and consumer goods, both core clients of NAM, suggests that the company will have a successful future under its new ownership,” said Mr. Thomson.

“We are excited to be acquiring NAM and look forward to working with the management team, employees and partners to further build this business and significant brand,” said Brandon White, Managing Director of Charlesbank. “We are committed to investing the resources required to enhance NAM’s growth, including installing Bill Redmond as CEO of NAM after the transaction closes. Since 1996, Bill has served as a CEO, Director and Advisor at over twenty companies, public and private, with a record of building substantial shareholder value through a combination of operating efficiency and growth through product, consumer and customer development. From 1981-1996, Bill held every level of sales leadership roles at Procter & Gamble, PepsiCo and Quaker Oats. Bill has also demonstrated successful leadership in take-private transactions and most recently was President & CEO of Innocor, Inc., one of the largest polyurethane foam and foam finished product manufacturers in North America. We feel confident that the company will exceed the expectations of customers, employees and suppliers in the months ahead.”

The transaction, which is expected to close in the fourth quarter of fiscal 2020, is subject to regulatory approval and customary closing conditions.

Allen & Company LLC served as financial advisor and Gibson, Dunn & Crutcher LLP served as legal counsel to News Corp in connection with this transaction. RBC Capital Markets served as financial advisor and Goodwin Procter LLP served as legal counsel to Charlesbank in connection with this transaction.