Davenport-based newspaper publisher Lee Enterprises has finalized a $50 million investment in the company, and has a new chairman of the board.
Lee Enterprises leaders this week announced that the company has closed its previously announced $50 million strategic equity private placement. The investment was led by David Hoffmann with participation from other existing investors in the company, providing Lee with committed capital and a strengthened financial and governance foundation as it moves into its next phase. The company received $50 million of gross proceeds at the closing of the transaction, before transaction expenses, it said in a news release.
In the Quad Cities region, Lee is the publisher of the Quad-City Times, The Moline Dispatch/Rock Island Argus and Muscatine Journal newspapers. It publishes more than 350 weekly and specialty publications serving 73 markets in 26 states.
Concurrently with the closing of the $50 million investment, an amendment to the company’s existing credit facility became operative, reducing the annual interest rate on approximately $455.5 million of Lee’s outstanding long-term debt to 5% from 9% for a five-year period, materially improving the company’s capital structure and cash flow outlook.
As part of the closing, Mr. Hoffmann joined the company’s board of directors as its chairman.
Mr. Hoffmann is a renowned entrepreneur and philanthropist. As the founder and chairman of Hoffmann Family of Companies, he oversees a family-owned network of enterprises that employs more than 17,000 people worldwide. This network includes more than 200 distinct brands and properties spanning 30 countries.
“The successful closing of this investment represents an important milestone for Lee Enterprises. This transaction strengthens our balance sheet, provides additional financial flexibility, and supports our continued digital transformation,” Nathan Bekke, Lee’s interim CEO, said in the release. “We are excited to welcome David Hoffmann to the company’s board of directors and appreciate the confidence he and our investors have shown in Lee.”
Lee Enterprises announced the $50 million strategic equity investment and leadership changes on Tuesday, Dec. 30.
In the same release, Lee announced the retirement of President and CEO Kevin Mowbray, who had a 39-year career with Lee, serving in 13 of its markets. Mr. Bekke, Lee’s chief operating officer, stepped in for the interim as the board conducts a search for a permanent CEO.
