The Citizen's media family has just grown in size and prestige.
Glacier Media announced Tuesday its acquisition of Postmedia Network's B.C. community newspapers and the Victoria Times Colonist.
"The news today of the acquisition by our parent company Glacier Media Inc. of a number of significant titles owned by Postmedia is welcome for all of us here at The Citizen," said publisher Hugh Nicholson.
"Not only does it reaffirm the strength of our company, but it proves once again that, contrary to some of the reports out of the U.S., newspapers are alive and well in Canada and still able to command an excellent price."
The acquisition of the Western-based community newspaper groups, Lower Mainland Publishing and the Vancouver Island Newspaper Group, gives Glacier the broadest local newspaper coverage in Western Canada.
"This increases the market reach we now offer for local, regional and national advertisers, and provides for significant digital media opportunities," said company president and CEO Jonathon Kennedy.
It includes two other dailies and 20 weekly and bi-weekly community papers.
The Times Colonist was founded in 1858 and serves Victoria and Vancouver Island. It is one of Canada's oldest newspapers. Other papers it will buy include the Vancouver Courier, the Nanaimo Daily News and the North Shore News.
It does not include The Vancouver Sun or The Province.
The assets and some significant real estate cost Glacier $86.5 million, which will be financed through bank borrowing.
"While the transaction is being financed with bank borrowings, Glacier will be in a stronger position as a result of the acquisition with manageable debt levels and increased cash flow," said Kennedy.
"Overall, the acquisition strengthens Glacier's competitive position."
The Toronto-based Postmedia said it will use the money from the Glacier deal to further cut debt.
"We are pleased to announce a transaction that realizes the value of the community newspaper groups in Western Canada along with the Times Colonist, a newspaper with a proud 153-year history," Paul Godfrey, president and CEO of Postmedia, said in a separate release.
"The transaction allows us to pay down debt and focus on our core properties, the ongoing transformation of our organization and growth areas of our business."
Godfrey said the media chain's focus for fiscal 2012 is on transformation and revenue growth.
"As we look ahead, our success will be in finding new opportunities for growth while transforming our organization to meet the very real changes in our industry. We remain committed to our digital first focus now and into the future."
Meanwhile, Glacier, based in Richmond, B.C., will take on more debt to finance the purchase with bank loans.
It said it will focus in the short-term on paying down debt and integrating the new papers into its business.
"While the transaction is being financed with bank borrowings, Glacier will be in a stronger position as a result of the acquisition with manageable debt levels and increased cash flow," it said.
"In addition to operational needs and acquisitions, a portion of any increased cash flow could be returned to shareholders in the future through share buy backs and increased dividends."
The transaction is expected to close by the end of November.
Glacier Media focuses on three media markets: local newspapers, trade information and business and professional information markets.
The deal comes just after rival media group Torstar (TSX:TS.B) made two newspaper acquisition deals in the last week.
The Toronto-based company said Monday it is paying $22.5 million to buy Performance Printing Ltd. of Smiths Falls, Ont., a publlsher of community papers and ad flyers.
Late Friday, Torstar announced it will pay $51.5 million to take nearly full control of the Canadian chain of Metro free daily newspapers, which are read by more than one million commuters each day.
The Toronto-based media group, which owns the Toronto Star, other dailies, community newspapers and the Harlequin book-publishing business, said it has raised its stake in Metro to 90 per cent from 50 per cent.
-- with files from CP
