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October 24, 2006

Want to Buy Contrarian? Think Gatehouse Media

posted by MR WAVETHEORY at 10/24/2006 04:01:00 PM
GateHouse Media Inc. (NYSE GHS) owns a chain of regional newspapers and its IPO just priced tonight at $18 per share (at the top of the range of $16-18). They sold 40% of the company and 13.8 million shares. The underwriters were Goldman Sachs Group, Inc. (NYSE GS) and Wachovia Securities (NYSE WB).

Gatehouse was formed last year when a New York investment firm purchased Liberty Publishing Group. It recently bought two Massachusetts community newspapers for $413 million, including The Patriot Ledger of Quincy and The Enterprise of Brockton. The IPO proceeds were $248.4 million which means it is yet another private equity deal whose IPO will pay for a large porti
on of the purchase price. The pricing gives the company an initial market capitalization of about $621 million. The Fairport, New York-based company plans to use net proceeds from the offering to repay debt. GateHouse Media has a portfolio of 423 community publications and more than 230 related Web sites. Its core products are 75 daily newspapers, 231 weekly newspapers, and 117 shoppers, which are generally advertising-only publications.
You can see from the map that most of Gatehouse Media's papers are based in the mid West and the Eastern seaboard. The company has 3900 employees and was founded in 1997.The Gatehouse at The Bishop's Palace Wells in Somerset.

So, what exactly is a Gatehouse? According to Wikipedia, A gatehouse is a feature of European castles and mansions. Gatehouses were first constructed in the second half of the 16th century in England when the entrance gateway, which formed part of the principal front of the earlier feudal castles, became a detached feature attached to the mansions only by a wall enclosing the entrance court. The gatehouse then constituted a structure of some importance, and included sometimes many rooms. At a later period smaller accommodation was provided so that it virtually became a lodge, but being designed to harmonize with the mansion it presented sometimes a monumental structure.

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