January 22, 2003
American Securities Capital Partners Buys Suburban Newspaper Chain
American Securities Capital Partners (ASCP), a New York private-equity investment firm, announced today it has acquired a controlling interest in Westward Communications, publisher of 61 community newspapers in Texas and Colorado. The transaction was valued at approximately $100 million.
The chain includes two Houston-area daily newspapers - the Courier in Montgomery County and the Pasadena Citizen - and 59 paid and free community weeklies. Westward has 29 newspapers in the Houston market, 19 in East Texas and 13 in the Denver/Colorado Springs area.
Paul Rossetti, an ASCP managing director who negotiated the transaction for his firm, said the Westward management team will also hold a stake in the company and will remain in place. The team includes Robert McMaster, chief executive officer; J. Tom Graham, chief operating officer; Steven Lencke, Colorado Group president, and Thomas Farrell, vice president, production.
Rossetti said all of the weeklies rank first in their markets and, in aggregate, serve more than 900,000 households. The newspapers have a diversified advertising base, he said, with more than 24,000 active advertisers and no significant customer or industry concentration.
"This is a stable cash-flow business with strong market positions in high-growth suburban markets," Rossetti said. "It offers an outstanding platform to expand through acquisition, and its management team has shown that it is proficient in integrating acquisitions."
"In every case," Rossetti said, "these newspapers meet a need for local news and information that the urban dailies and other media in their regions do not provide. As a result, they have a solid and loyal base of readers that continues to grow."
Westward Communications, based in the Woodlands, near Houston, has two printing facilities in Houston, one in Gladewater in East Texas and one in Castle Rock, Colorado, serving the central Colorado markets. An additional source of revenue, Rossetti said, is a trade printing relationship Westward has with USA Today that dates back to 1982. Westward's Pasadena plant was one of the original printing sites for USA Today.
ASCP acquired Westward from an investor group led by Stonehenge Partners, a private-equity investment firm based in Columbus, Ohio, whose principals had previously been with Banc One Capital Holdings, the merchant-banking subsidiary of Banc One Corporation.
Senior debt for the transaction was provided by a syndicate led by GE Commercial Finance. No subordinated debt was used, in accordance with ASCP's longstanding practice.