Cribb, Greene & Associates has experienced a solid uptick in transaction activity late in 2011 and early 2012 compared with the last few years. The typical EBITDA multiples paid for newspapers is in the 3x to 5x range in most industry transactions although current Cribb, Greene sales are somewhat higher. Our firm has recently closed transactions on five separate weekly newspapers/clusters, and two daily newspaper transactions. These transactions include both cash and seller-financed sale structures and the EBITDA multiple range is 3x to 6.8x with an average multiple of 4.9x. Several sales have been financed by conventional bank loans.
It appears that some sellers who have stayed on the sidelines through the poor economy have now decided to go ahead with the market process. Values are down from three years ago, and the general feeling is that values and EBITDA multiples will probably not return to previous levels. Other newspaper valuation methods such as the revenue multiple approach and discounted future cash flow approach are no longer considered valid by buyers, with the trailing EBITDA multiple valuation method carrying most weight.
Buyer interest has certainly increased with more qualified companies looking at newspaper offerings. The most active market segment is in small dailies and large weeklies/weekly clusters.