Longer-term needs for Tronc remain digital growth and strategic M&A
By Trey Williams
The best-case scenario for Tronc Inc. in its potential acquisition of Chicago Sun-Times owner Wrapports Holdings LLC is that it gets a good price and the deal improves cash flow.
Tronc TRNC, +1.83% , which publishes the Chicago Tribune, the Los Angeles Times, the Baltimore Sun and the Orlando Sentinel, announced on Monday that it had entered into a nonbinding agreement to acquire Wrapports. Wrapports said that it would entertain other offers but that if no other viable buyers expressed substantial interest within 15 days it would finalize its sale to Tronc.
“It’s a head scratcher,” said Singular Research analyst Robert Maltbie. “We’re in the dark because we don’t know the valuation of this company. I like it if it’s accretive to [Tronc’s earnings before interest, tax, depreciation and amortization], if they’re getting it for a great price, and it helps maintain cash flow so the company doesn’t go under.”
But even then, this would likely be nothing more than a Band-Aid for Tronc, according to Doug Llewellyn, chief operating officer of the digital publishing platform Purch.