Local World will be led by Steve Auckland, currently chief executive of Northcliffe Media, and will be chaired by former Mirror Group chief executive and founder of Mecom Group David Montgomery. Karen Wall, former Metro head of marketing and Northcliffe executive director, will also work at the new venture in a marketing capacity.
The new company claims it will reach a combined weekly newspaper audience of 6 million readers and 7 million online users. DMGT will contribute more than 80 titles to the new venture, while Iliffe News & Media will provide 36.
Local World says it aims to “revitalise” local media by offering “fully integrated” print and digital media services that will focus on relevant content, advertising and local services.
It has committed to invest in “innovative information technology systems” to help advertisers target digital audiences and will be developing a portfolio of commercial products for small and medium sized advertisers. Both editorial and commercial staff are due to go on an “intensive” training programme to develop digital services for local users.
Martin Morgan, chief executive of DMGT, says: “This is good news for DMGT, for all who work at Northcliffe and for the future of local news media. With this move we receive cash from the sale and also retain a stake in a business with excellent prospects. Local World has talented people and a clear vision for the future of local media. I think the media industry has been waiting for this logical next step for regional newspapers.”
DMGT, which owns The Daily Mail and Metro, will receive £52.5m in cash and a 38.7 per cent share in Local World as part of the deal. Iliffe News & Media, which owns titles such as the Burton Mail and Cambridge News, will be acquired by Local World in exchange for a 21.3 per cent share in the business.
Remaining shareholders include DGMT national and regional rival Trinity Mirror, which will have a 20 per cent holding, and investment funds and asset management groups.
Local World will have an enterprise value of about £100m once the deal is completed.