MORE than 100 jobs have been saved after a management buy-out of a regional newspaper group.
The senior management team at Celtic Media Group will pay €5.5m for the Irish arm of the business from its Scottish owners, as part of a 'pre-pack' receivership deal.
Under the terms of the deal, Celtic's chief executive Frank Mulrennan and finance director Frank Long will take control of the business, along with non-executive chairman John Wood and other middle and senior management.
The deal secures the future of the group, which runs five newspapers and a contract printing business, employing 125 people. Celtic Media counts the 'Offaly Independent', 'Meath Chronicle' and 'Westmeath Examiner' among its titles.
The acquisition was financed by a loan from Lloyds Bank, which also wrote-off a substantial debt owed by the old company.
The most recent accounts for Celtic Media Group show the company had net debts of some €38m at the end of 2009. The company went into examinership under PWC's Michael O'Regan late on Wednesday evening, and the buy-out was quickly arranged. As part of the deal, all creditors to the old company will be repaid in full, except for Lloyds.
While pre-pack examinerships are rare in Ireland they are common in the UK and elsewhere. The process is thought to have been sped up by two previous approaches to the Celtic Media in the last 18 months, including one by the private equity firm Lioncourt Capital last summer. Those approaches helped determine a reasonable value for the business.
IBI Corporate Finance advised the management team on the acquisition.
Mr Mulrennan was understandably delighted with the deal, and said the company would now concentrate on stabilising its position and building on its contract printing business.
The group already prints 12 titles under licence at its presses in Navan, while also providing all pre-press activity, including graphic and editorial design for the 'Connacht Telegraph' and 'Sligo Weekender'.
"We're very excited with the deal and we will now look at taking opportunities on the online side of the business and ramping up the printing side of the house.
"As you'd expect we will also continue to look very closely at our costs but there is no question of job losses, those positions have been secured with this deal," he said.
The business is profitable at an operating level, and the removal of the debt burden will "give the business a chance to flourish", he added.
"We are now positioning our company to benefit from our multi-platform digital strategy and further consolidation in the regional media market, which we feel is inevitable."
The original newspaper portfolio was built up in the early part of this century at a cost of close to €65m. There were a number of investors in the Celtic Media Group, including Dunfermline Press.
Mr Mulrennan, a former Irish Independent journalist, will be the largest shareholder in the new company.
Combined with Mr Cullen, a chartered accountant by training and John Wood, a business consultant, the three men will own 75pc of the company, with the remaining 25pc split between 11 middle and senior management in the business.