Acquisition of local media assets from Trinity Mirror plc

Friday 6 July 2007

Northcliffe Media, the local media division of DMGT, announces that it has exchanged contracts to acquire the assets of three local divisions from Trinity Mirror plc for a cash consideration of £64.15 million. Completion is expected later this month. The assets had an adjusted EBITDA of £7.3 million for 2006.

The divisions are East Surrey and Sussex Newspapers, which publishes two paid for weekly newspapers (Croydon Advertiser and Surrey Mirror), five free papers and numerous local websites; Kent Regional Newspapers, which publishes six paid for weekly newspapers including the Folkestone and Dover Herald and seven free newspapers including the Adscene Series; and Blackmore Vale Magazine, a unique free distribution product published in Dorset.

The South East is currently Northcliffe's smallest region. The new titles and websites are complementary to Northcliffe's existing portfolio, extending the reach of our products to a wider audience of both advertisers and readers. They also provide a platform to extend the Group's online products to a wider geographic area. The business will be combined with Northcliffe's South East division, apart from Blackmore Vale Magazine, which will become part of the South West Weeklies division.

Over the last sixteen months, Northcliffe has focused on becoming a local media organisation through the integration of its digital and newspaper publishing activities. It has also dramatically improved operating efficiency. Recent disposals include Aberdeen Journals, Northcliffe Retail and its 25% shareholding in fish4.

Northcliffe continues to record slowly improving advertising revenues which were up by 0.3% in the quarter to the end of June compared to a decline of 1.0% in the previous quarter. Recruitment advertising grew by 5.5% (compared to 2.0%) over the same period and property was up by 7.5% (8.2%).

We expect the transaction to be earnings enhancing from the date of acquisition.

Commenting on the announcement, Michael Pelosi, Managing Director of Northcliffe Media said: "Over the last year the transformation of Northcliffe has been dramatic. We believe that the division has an excellent future as a provider of high quality local media content and services. Today's acquisitions strengthen our publishing reach in a region demonstrating strong economic growth where digital opportunities are particularly attractive. We are acquiring strong products which are at the heart of their local communities and are looking forward to working with our new colleagues".

Enquiries:
Peter Williams, Finance Director, DMGT, 020 7938 6631
Michael Pelosi, Managing Director, Northcliffe, 020 7400 1454
Andrew Honnor, Tulchan Communications, 020 7353 4200

Appendix

Titles being acquired:

Source: July to December 2006 ABC/VFD

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