Newcastle Investment Corp. announced that it acquired Dow Jones Local Media Group from News Corp for $87 million. The company made a total equity investment of $54 million, including transaction expenses, and financed the remainder of the purchase price with $33 million of debt.

Local Media Group operates 33 local publications, including 8 daily and 15 weekly newspapers, in 7 states. Many of these publications have been providing vital local content to their communities for over 75 years.

The Local Media Group operations will be managed by GateHouse Media, one of the largest publishers of locally based print and online media in the U.S. with a portfolio of products that includes over 400 community publications and approximately 350 related websites. GateHouse is an affiliate of Fortress Investment Group, Newcastle’s manager.

Newcastle, which owns approximately 52% of GateHouse’s $1.2 billion of debt, also announced that it entered into an agreement with other creditors related to a potential restructuring of GateHouse pursuant to a prepackaged plan of reorganization under chapter 11 of title 11 of the United States Code. Newcastle expects to convert its debt position into equity of GateHouse, and the other creditors will have the option to convert their positions into either equity or cash at a price of 40% of par.

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