Media Deal Would Sell Leesburg Today; Shareholders
To Vote On Proposed Merger With ACN In March
Feb 08, 2006 -- The board of directors of Amendment I Inc. announced
this week that shareholders will be asked to approve a merger of the Leesburg-based
publishing company that owns Leesburg Today, Loudoun Magazine and Loudoun
Business with American Community Newspapers in a stock transaction.
Shareholders will also be asked to approve sale of the corporate headquarters
in a separate transaction not involving ACN, according to Board Chairman
Jack Walter.
Amendment I Inc.’s stewardship of Leesburg Today, Loudoun Magazine
and Loudoun Business, has led to each dominating their respective market
segments
in Loudoun County, which is among the fastest growing and wealthiest counties
in America.
The Amendment I Inc. board has set a March 20 date for a shareholder meeting
to complete voting on the proposed transactions.
“
We were approached several months ago by American Community Newspapers and
have spent the past several monthsexamining both a prospective deal with
that company and the other long term options available to a robust publishing
company in a vibrant market,” Walter said this week. The attractiveness
of our company to a major publishing outfit is a testament to the success
of
its products
and the unwavering long term faith our shareholders have demonstrated."
“For the Board of Directors, the issue boiled down to how Amendment I Inc.
could best take advantage of its current dominance while aligning itself with
a major
national publisher capable of integrating our Loudoun operations with
those elsewhere in Northern Virginia and in similar growth markets across the
nation,” Walter
said.
American Community Newspapers owns more than 60 daily and weekly newspapers
in several major U.S. markets, including Dallas, TX and Minneapolis,
MN.
“
Northern Virginia is one of the nation’s prime growth markets and the
Amendment I deal is a major component of our plans for expansion in
that market,” said
ACN CEOGene Carr, pointing out that the company has already
purchased the Sun Gazette papers, which included Middleburg
Life, and
is in ongoing discussions with other publishers. “We are pursuing aggressive
acquisition and start-up plans in this market, and look forward to
the talents the Amendment I Inc. team can bring to those plans as well as
to further
consolidating the Loudoun Market.”
Carr is no stranger to the Loudoun market, having served over a decade
ago as an executive vice president of the publishing company that owns
the Loudoun
Times-Mirror.
Leesburg Today was launched in 1988 as an alternative weekly paper
to the then-dominant paid circulation Loudoun Times-Mirror by co-founders
Brett
Phillips and William
C. Harper, together with five employees working around the clock in
a
loft at Market Station in Leesburg. Its first issue was 12 pages. Since
that
time, the newspaper has grown to dominate the Loudoun print media market
and its
profits spawned two additional publications: Loudoun Magazine, which
launched in 2001 as a four-color product aimed at the fabric, history
and diversity
of the county; and Loudoun Business, which began publishing in 2003
as a monthly journal covering the burgeoning county business market
and
its growing
importance
in the Washington metropolitan market.
Amendment I Inc. now employs 36 people, including three of the original seven: Phillips, Leesburg Today Editor Norman K. Styer and Corporate Art Director Libby Pinner.
Phillips announced to the corporate staff early this week that he is
retiring because of medical reasons.
A turning point in the evolution of the publishing company came in
1991 when its original investors applied to the State Corporation Commission
for authority
to convert to a quasi-public company under the Virginia Community Business
Act. That move led to bringing in shareholders who could make a media
investment as small as $250 to become part of a community-owned publishing
venture.
The shareholder list quickly grew from the original dozen to more than
145 citizens,
and Leesburg Today’s reputation for hard-hitting government coverage
began to translate into bottom line business success. It also provoked
increased public pressure for wider distribution, leading to the newspaper
eventually
expanding its mailed circulation to include all of western Loudoun
and what was to become the fast-growing Ashburn area. The newspaper
has grown to a
mailed, audited circulation of 60,000 while Loudoun Magazine has a
combination mailed
and newsstand circulation of 25,000 and Loudoun Business has a targeted
mailed circulation of 13,000 throughout the Washington metropolitan
area.
Just two years after taking on new shareholders, Leesburg Today succeeded
in a three-year lobbying effort to get the Virginia statutes changed
to permit controlled circulation newspapers to carry legal and public
notice
advertising.
Passage of that legislation and its signing into law by then-governor
Doug Wilder triggered a sea change in the cost of public notice advertising
to citizens
and governments of Virginia, slashing by up to 90 percent rates charged
by paid circulation newspapers that had heretofore had a monopoly on
these
ads.
“The timing of ACN’s initial expression of interest in 2005 coincided
with long term strategic discussions our board had been engaged in
over how to expand into markets we believe to be ripe for the kind of work we
do,” Phillips
said this week. “One of the things I learned during a long
career in entrepreneurial publishing is that the risks in success
are sometimes far more
formidable than the risks of failure. In success, one has the obligation
to realize that a company’s achievements come down to the faith
of its shareholders and the work of its people. We initially repaid
our shareholders
with the quality
of our products. Now, we are preparing to repay them in the more
traditional way. The time is right to do that.”
The gross pre-tax value of the transactions involving the publishing
operations and real estate is expected to exceed $10 million.