Newcastle Investment Corp.'s Planned Senior Housing Spin-Off Should Mean Gains For Shareholders.
David White • 13 Comments
David White • 13 Comments
Mar. 3, 2014, 9:58 AM
- Its first deal since being spun off from Newcastle Investment (NCT -2.7%) just days ago, New Media (NEWM -2%) acquires the Victorville (CA) Daily Press and related assets/publications from Freedom Communications for $8M. The publications have a circulation of about 50K, revenue of $12.5M, and operating margins before depreciation and amortization of just over 20%.
- The purchase is expected to be immediately accretive.
- It's a start. New Media manager Fortress Investment has identified about $1B in acquisition candidates.
Nov. 19, 2013, 9:21 AM
- Pricing its 50.5M share secondary for gross proceeds of about $264.9M, Newcastle (NCT) investment announces the purchase of a 52-property senior housing portfolio from Holiday Acquisition for roughly $1.01B. Newcastle will put up about $300M and fund the rest through a non-recourse mortgage.
- The portfolio has 5,885 units located across 24 states. It's 100% private pay with occupancy rate of 91%. Leases with affiliates of Holiday will have first-year rent equal to 6.5% of the purchase price.
- Upon closing of this and other committed deals, Newcastle will have invested about $600M of equity in senior housing assets.
- Press release - purchase
- Shares -0.9% premarket after falling nearly 5% upon the offering announcement last night.
Sep. 4, 2013, 1:51 PM
- What's Newcastle (NCT +3.5%) doing buying a newspaper company? The stock reverses an early dive on news of the Local Media acquisition and turns higher following the release of the investor presentation.
- Newcastle notes the purchase was made for 3.4x of 2013 EBITDA with an expected levered yield of 25% in year 1 and 30% in year 2. The company also comes with $33M of appraised real estate value - backing that out means the purchase was for 2.5x 2013 EBITDA, with large urban peers trading at 4.0x-5.5x.
- NCT is considering the spin off Local Media and GateHouse Media into a new public company, "New Media" (as part of the deal, Newcastle converted its debt holding in GateHouse into a 59% equity stake). New Media intends to pay out a substantial portion of its free-cash flow in the form of a dividend with expected yield of about 20%.
- "With industry distress comes buying opportunity ... once trading at 10x EBITDA, we believe we can buy local newspapers and directories at (fractions of that valuation)."
- The conference call remains set for 2:30 ET.
Sep. 4, 2013, 10:35 AM
- Newcastle Investment (NCT -2.2%) acquires Dow Jones Local Media Group from News Corp. (NWS, NWSA) for $87M.
- Local Media operates 33 local publications in 7 states. The business will now be managed by GateHouse Media (GHSE.PK), an affiliate of Fortress Investment (FIG), which is Newcastle's manager.
- Newcastle owns about 52% of GateHouse's $1.2B in debt and it and other creditors have agreed on a prepackaged Chapter 11 filing in which Newcastle expects to convert its debt holdings into equity of GateHouse.
- Presentation and conference call at 2:30 ET.
Jul. 24, 2012, 12:16 PMNationstar Mortgage (NSM -9.6%) plummets as Berkshire Hathaway (BRK.B) emerges as the front-runner in the battle to buy not just ResCap's mortgage portfolio, but its entire operation, reports the NYPost. Nationstar - the mortgage arm of hedge fund giant Wesley Eden - had originally hoped to get all and then at least part of the package. | Jul. 24, 2012, 12:16 PM | 2 Comments
Newcastle Investment Corp., a real estate investment trust, invests in commercial real estate companies located in the US. It primarily invests in real estate & other debt and senior housing areas.
Industry: REIT - Diversified
Country: United States
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