The Scotsman publisher JPI Media is being sold to National World, the company set up by publishing industry veteran David Montgomery.
Staff at JPI Media, which also owns regional titles such as The Yorkshire Post, have been told of the sale which takes place on at midnight on 2 January.
It is understood the sale price was £10.2m with £5.2m upfront in cash and two further payments of £2.5m on 31 March 2022 and 31 March 2023.
An email to JPI Media staff from CEO David King said: “I am now able to update you on the sale process of our regional publishing business.
“I can confirm that today, 31st December 2020, National World plc has agreed to acquire JPIMedia Publishing Ltd and its subsidiaries. It will take ownership of the business at midnight on the 2nd January 2021.
“Terms and conditions of employment of staff are not affected by the sale.
“As I have previously said, it is the nature of these processes that they are conducted confidentially, and despite speculation and rumour it has not been possible to provide you with any details on progress until this point.
“I would like to thank all of you for the exceptional commitment and passion you show every day and I believe that our titles, staff, audiences and other stakeholders can now benefit from being part of this new organisation.
“Over the last two years, we have made great progress with our digital strategy, changing the way we work, how we serve our audiences, diversifying our revenue streams and supporting our advertising customers. While 2020 has been a very difficult year, over the coming months we must continue to build on the momentum that you have created.
“The publishing industry is undergoing a fundamental shift and being part of National World will help sustain our business and local media for the longer term.”
The deal will bring to an end a two-year period which has seen JPI Media put up for sale and then removed from the market.
The predecesor company Johnston Press was placed into administration in November 2018 and bondholders including Goldentree Asset Management subsequently took control of the business.
The administrators of Johnston Press said that a £150m bid had been tabled for JPI Media, which then included the ‘i’ newspaper. Afyer the sale the decision was made to sell the group as a whole rather than selling individual titles piecemeal.
Various publishers including Insider owner Rech and The Herald owner Newsquest were linked with a possible deal for the group.
But latterly it was believed to be between National World and Archant, although there may well have been competition concerns with Archant in some areas covered by JPI Media titles.
It is understood that DC Thomson, publisher of The Press and Journal, The Courier and The Sunday Post had been interested in The Scotsman, Scotland on Sunday and Edinburgh Evening News but had latterly pulled out of the bidding.
It will be the second time that David Montgomery has led the purchase of a regional publishing group.
He previously formed Local World in 2012 by acquiring the regional arm of the Daily Mail group Northcliffe and Iliffe publications.
Reach, then Trinity Mirror, took a 20% in the business before buying it outright in 2015 and combinig it with its regionals division.
Since that time Montgomery has been chairman at Local TV, which runs a number of city-based local TV stations across the country.
National World’s board includes former Reach finance director Vijay Vaghela and Mark Hollinshead, founder of PR company Hollicom and a former managing director of the Daily Record and Sunday Mail and then Mirror Group newspapers. Hollinshead becomes chief commercial officer of National World following the deal.
Daniel Cammiade, the chief executive of Surrey-based Tindle Newspapers, becomes a non-executive director of National World.
National World chairman David Montgomery said: “National World is a public company set up to invest in and develop local publishing to create a modern sustainable model.
“We are very proud to be associated with JPIMedia’s 100 historic brands and recognise the dedication of all the staff who serve their communities in print and online, particularly in current challenging times.
“National World is committed to growing the company through the enhancement of content and technology and we look forward to discussing these plans with everyone and, once possible, visiting all locations.
“On a personal note I have been associated with some JPIMedia titles since I was a student journalist and witnessed over decades how their great and honest reporting has contributed to democratic and societal development — a tradition that National World will continue to champion.”