News Corp is selling News America Marketing, which creates in-store and publication coupon inserts.
Photo: Kevin Hagen/Getty ImagesNews Corp agreed to sell News America Marketing, its coupon-publishing unit, for about $235 million in cash to the private-equity firm Charlesbank Capital Partners as the media company looks to focus on core areas of its business.
Under the transaction, which is expected to close in the fourth quarter, News Corp would have the option to keep up to a 15% equity in the business, with 5% at closing and a 10% five-year warrant, the company said Tuesday. News Corp owns Dow Jones, publisher of The Wall Street Journal.
The transaction includes $50 million in cash upon its closing and deferred payments of between $125 million and around $185 million, due five years after the deal closes.
News America Marketing creates in-store and publication coupon inserts. It helps brands promote goods at stores in the U.S. and Canada through displays, signs and shopping-cart ads. It also helps businesses reach consumers through its library of purchase data from millions of shoppers in its database.
News America Marketing has for years dominated the market for such services, but it has also been the target of litigation. In 2016, the company reached a $250 million settlement in a lawsuit brought by several major consumer brands that accused News America Marketing of monopolistic practices and overcharging for in-store discount advertising. News Corp denied any wrongdoing.
News Corp said last year it was reviewing options for the unit to focus on goals such as the creation and distribution of content and global digital real-estate services.
“The continued strong performance of supermarkets and consumer goods, both core clients of NAM, suggests that the company will have a successful future under its new ownership,” Chief Executive Robert Thomson said Tuesday.
For the last three months of 2019, the unit recorded revenue of $191 million, or 7.7% of News Corp’s overall revenue.
Write to Dave Sebastian at dave.sebastian@wsj.com
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March 31, 2020 at 10:23PM
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News Corp to Sell News America Marketing Unit for $235 Million - The Wall Street Journal
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