New Media Investment Group Inc. (NYSE:NEWM) entered into a definitive agreement to acquire Gannett Co., Inc. (NYSE:GCI) for $1.7 billion on August 5, 2019. Under the terms of the agreement, shareholders of Gannett Co., Inc. will receive $6.25 in cash and 0.5427 of a share of New Media Investment Group Inc. for each share they hold. Each option of Gannett shall, automatically be cancelled and converted into the right to receive a cash payment equal to the excess of (i) the sum of the cash consideration of $6.25 and an amount equal to the product of the exchange ratio of 0.5427 and New Media closing price over the exercise price per share of New Media common stock subject to such New Media stock option. Each outstanding restricted stock unit award of Gannett will be converted into New Media restricted stock unit award, each outstanding performance share unit award of Gannett will be converted into New Media restricted stock unit award and each Phantom share unit will be converted into adjusted Phantom share units. Each restricted stock award will convert into the stock consideration and right to receive the cash consideration. After the close of the transaction, shareholders of Gannett Co., Inc. will hold approximately 49.5% of the combined company and shareholders of New Media Investment Group Inc. will hold approximately 50.5%. New Media Investment Group Inc. expects to fund the cash portion of the consideration through a combination of cash on the balance sheet and a new term loan facility to be funded at closing pursuant to a binding commitment from funds managed by affiliates of Apollo Global Management, LLC. The term loan will be a five-year senior secured term loan facility in an aggregate principal amount of $1.79 billion. Gannett will become a wholly owned subsidiary of New Media. Post closing, New Media and its subsidiary GateHouse will be rebranded and operate under the “Gannett” brand.

The combined company's management team will be led by New Media Investment Group Inc.'s current Chairman and Chief Executive Officer (CEO), Michael Reed. Alison Engel, Gannett Co., Inc.'s current Chief Financial Officer (CFO), is expected to serve as the CFO of the combined organization. Gannett's newly appointed CEO, Paul Bascobert, will become CEO of the combined company's operating subsidiary. The combined company's Board of Directors will have nine members, including Michael Reed as Chairman, five independent directors from New Media Investment Group Inc., and three independent directors from Gannett Co., Inc. Kevin Sheehan, New Media Investment Group Inc.'s Lead Director, will serve as the combined company's Lead Director.

The agreement contains certain termination rights for each of Gannett and New Media, including, among others, the right to terminate the agreement (i) if the consummation of the merger does not occur on or before February 5, 2020, subject to an automatic extension to May 5, 2020, if required regulatory clearances have not been obtained but all other closing conditions have been satisfied (or are capable of being satisfied) at such time, (ii) if either party fails to obtain the requisite approval of its stockholders, (iii) subject to certain conditions, to enter into a definitive agreement with respect to a superior proposal, as applicable, prior to the receipt of the approval of its stockholders, or (iv) if, prior to the receipt of the approval of the other party's stockholders, the other party's Board of Directors has changed its recommendation that its stockholders (a) in the case of Gannett, adopt the agreement, and (b) in the case of New Media, approve the transactions contemplated by the agreement. Upon termination of the agreement under specified circumstances Gannett is required to pay New Media a termination fee equal to $45 million cash. New Media is required to pay Gannett a termination fee equal to $28 million in cash in reciprocal circumstances. The transaction is subject to the satisfaction of customary closing conditions, including receipt of regulatory clearances, including the expiration or termination of the applicable waiting period (and any extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, the effectiveness of the Registration Statement on Form S-4 to be filed by New Media, listing approval for shares of New Media common stock to be issued in connection with the merger, there being no changes made to the A&R management agreement and approval by the shareholders of New Media Investment Group Inc. and Gannett Co., Inc. The transaction has been unanimously approved by the transaction committee of New Media Investment Group Inc. and by the Boards of both New Media Investment Group Inc. and Gannett Co., Inc. New Media Investment Group Inc. has formed a transaction committee to review, evaluate, and negotiate the merger. As of September 25, 2019, the applicable waiting period under the HSR Act expired. As of November 14, 2019, the transaction was approved by the shareholders of New Media and Gannett at their respective special shareholder meetings. The transaction is expected to close by the end of 2019. As of November 14, 2019, the transaction is expected to close on November 19, 2019. The transaction is expected to be highly accretive to New Media Investment Group Inc.'s earnings and free cash flow in year two.

Credit Suisse acted as financial advisor and fairness opinion provider and Damien R. Zoubek, Brittain A. Rogers, George E. Zobitz, Christopher J. Kelly, Christine A. Varney, Jesse M. Weiss, Andrew W. Needham, Christopher K. Fargo, Andrew Carlon, David J. Kappos, Jonathan J. Katz, Michelle M. Garrett, Matthew Morreale, Joyce Law, Brian M. Budnick and Laurel R. Berkowitz of Cravath, Swaine & Moore LLP acted as legal advisor to New Media. Jefferies LLC acted as financial advisor and fairness opinion provider and William B. Chandler III, Ryan Greecher, Martin W. Korman and Douglas K. Schnell of Wilson Sonsini Goodrich & Rosati as legal advisors for New Media Investment Group Inc.'s transaction committee. Greenhill & Co. and Goldman Sachs & Co. LLC acted as financial advisors and fairness opinion providers and Katherine D. Ashley and Kenton J. King of Skadden, Arps, Slate, Meagher & Flom LLP and Nixon Peabody LLP acted as legal advisors to Gannett Co., Inc. Ariel J. Deckelbaum, Ellen N. Ching and David Harris of Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as legal advisor to Fortress Investment Group and New Media Investment Group Inc. Latham & Watkins LLP acted as legal advisor to Credit Suisse in this offering. MacKenzie Partners, Inc. acted as the proxy solicitor to New Media as part of the transaction and will receive a fee of $75,000 for its services. Innisfree M&A Inc. acted as the proxy solicitor to Gannett in the transaction and will receive a fee of $50,000 for its services. New Media has agreed to pay Credit Suisse for its financial advisory services to New Media in connection with the proposed merger an aggregate fee of $13 million, of which $3 million was payable upon delivery of Credit Suisse's opinion and $10 million is contingent upon completion of the merger. New Media has agreed to pay Jefferies for its financial advisory services to the Transaction Committee in connection with the merger an aggregate fee of $3 million, of which $1.5 million was payable upon delivery of Jefferies' opinion to the Transaction Committee and $1.5 million is payable contingent upon consummation of the merger. Gannett has agreed to pay Greenhill a transaction fee of approximately $18 million, $2.5 million of which became payable upon the delivery of Greenhill's opinion and the rest of which is contingent upon completion of the merger. In connection with the merger, Gannett has agreed to pay Goldman Sachs a transaction fee estimated to be approximately $18 million, contingent upon consummation of the merger.

New Media Investment Group Inc. (NYSE:NEWM) completed the acquisition of Gannett Co., Inc. (NYSE:GCI) on November 19, 2019. The combined company will operate under the name “Gannett Co., Inc. Beginning on November 20, 2019, New Media will trade on the New York Stock Exchange under this name and its ticker symbol will be changed to “GCI”. Michael Reed will remain Chairman and Chief Executive Officer of the combined company and Paul Bascobert will serve as Chief Executive Officer of the operating subsidiary, Gannett Media Corp.