Media General, Meredith To Combine To Create Meredith Media General

Media General, Inc. (NYSE: MEG; and Meredith Corporation (NYSE: MDP; announced today a definitive merger agreement under which Media General will acquire all of the outstanding common stock of Meredith in a cash and stock transaction currently valued at approximately $2.4 billion to create a powerful new multiplatform and diversified media company to be known as Meredith Media General.

Under the terms of the agreement, Meredith shareholders will receive cash and stock valued at $51.53 per share, which represents a 12 percent premium to Meredith’s closing stock price on September 4, 2015.  Both classes of Meredith stock, Common Stock and Class B Common Stock, will receive the same consideration per share.  Based on Meredith’s net debt balance of $772 million at June 30, 2015, the transaction enterprise value is approximately $3.1 billion.

Media General has formed a new holding company, which after closing will be named Meredith Media General. Media General shareholders will receive one share of the new holding company for each share of Media General they own upon closing. Meredith shareholders will receive $34.57 in cash and 1.5214 shares of the new holding company for each share of Meredith they own upon closing. Upon the closing of the transaction, Media General shareholders will own approximately 65 percent and Meredith shareholders will own approximately 35 percent of the fully-diluted shares of Meredith Media General.

Upon the closing, the Board of Directors will consist of 12 directors, eight appointed by Media General and four appointed by Meredith. J. Stewart Bryan III, current Media General Chairman, will be Chairman of Meredith Media General.

Stephen M. Lacy will lead Meredith Media General as Chief Executive Officer and President. Joseph H. Ceryanec will be the Chief Financial Officer. The balance of Meredith Media General’s senior management team will be a combination of the two existing executive teams. The company will maintain corporate and executive offices in Des Moines and Richmond.  Meredith Media General will be incorporated in Virginia.

Meredith Media General will be well positioned to grow in a rapidly consolidating and evolving media industry.  It will use its strong financial profile to deliver substantial value to shareholders, customers and employees. This financial profile includes:
*Pro-forma annual revenues of $3 billion and EBITDA of over $900 million;
*More than $80 million of total synergies expected within the first two years with $60 million of run-rate synergies expected in the first 12 months of operations post-closing;
*Significant free cash flow that can be used to rapidly pay-down debt;
*Expected pro forma net leverage at closing of less than 5.5x, based on 2014/2015 average pro forma adjusted EBITDA, as per Media General’s credit agreement;
*Consistent with Meredith’s long history of Total Shareholder Return, a strong commitment to returning cash to shareholders via dividends over the longer term; and
*The opportunity to continue growing and expanding its portfolio on the national and local level as the media industry consolidates.

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