A move announced yesterday could have a big impact on the Canadian media landscape.
Torstar Corporation, parent company of the Toronto Star and other dailies such as the Hamilton Spectator and Waterloo Region Record and a number of community publications, has been sold to the newly formed NordStar Capital. The deal will see Torstar, a publicly traded company, taken private.
The business will be sold for $52 million. Torstar did not respond to requests for interviews at press time. A release announcing the move says the transaction “will allow for the continuation of the company’s storied history: a home for world class, local journalism and fearless, progressive positions.”
NordStar is controlled by Jordan Bitove and Paul Rivett and wholly owned by their respective families. Both have backgrounds in private investment and equity; Bitove spent nearly 10 years as partner at Spectrum Capital Partners while Rivett is the former president of Fairfax Financial. Rivett retired from his position as president in February, but remained chair of Fairfax. Fairfax was also the largest independent shareholder of Torstar.
NordStar approached Torstar about the acquisition in February 2020. It will acquire all issued and outstanding Class A and B non-voting shares for $0.63 per share in cash. This represents a 66.67% premium compared to the 20-day volume-weighted average trading price of the Class B voting shares on the TSE as of May 25.
“While we have loved the company and are immensely proud of it, the time has come to pass the torch,” said John Honderich, chair of the board at Torstar. “We hope the sale will benefit Torstar in the years ahead and believe that this is the beginning of an exciting new chapter for the company. We are delighted to know that the new owners have pledged to build on Torstar’s legacy of quality journalism and to promote the Atkinson Principles at the Toronto Star.”
In addition to Bitove and Rivett’s control, NordStar will appoint former Ontario premier David Peterson as vice chair of the Toronto Star following the transaction. CEO John Boynton is expected to continue his role following the completion of the transaction.
It’s been a rough several years for Torstar, although its situation is not unique within the Canadian legacy media landscape. Print revenues have continuously dropped over the years while a transition to digital has been a rocky road. The company launched and subsequently shuttered StarTouch, and has made two stabs at a paywall model for the Toronto Star online. It’s seen rounds of layoffs and ceased the print publication of its Star Metro brands last year after less than two years of operations.
Since the emergence of the COVID-19 pandemic, there has been a significant impact on Torstar’s bottom line. In April, it eliminated 85 positions as a result of falling advertising revenue across its Community and Daily Brands segments. For the first quarter of the fiscal year, the three months ended March 31, Torstar’s revenue was down 20% year-over-year, to a total of $92.5 million for operating revenue.
