NEW YORK, Feb. 17, 2015 /PRNewswire/ -- Wingspan
Investment Management, LP ("Wingspan"), a New York-based investment firm, today filed a
beneficial ownership report on Schedule 13G with the United States
Securities and Exchange Commission to disclose its beneficial
ownership of 4,980,156 shares of Lee Enterprises ("Lee" or the
"Company") (NYSE: LEE) for an approximate 9.1% passive stake in the
Company.
Stable cash flows and 2015 revenue growth
Wingspan is a strong supporter of management's current financial
strategy of using substantially all excess cash flows to reduce
leverage. Wingspan believes that the combination of a)
six-plus prior years of strong and stable cash flows and b) no
material debt maturities until 2022 is expected to provide
significant runway for aggressive debt reduction and continued
enhancement of equity value. Wingspan expects Lee to be able
to continue to produce levered free cash flow of roughly
$80 million per annum compared to its
roughly $160 million market
capitalization today, implying a 50% levered free cash flow yield
to the equity. Wingspan believes that Lee's long-dated debt
maturity schedule and stable cash flows warrant levered free cash
flow yields closer to 20%, in line with newspaper and other old
media companies, which would imply a Lee share price of
$7.34/share.
In addition, with the help of industry leading subscription
revenue growth and continued strength in digital revenue growth,
Wingspan believes roughly 50% of Lee's revenues can be expected to
grow in 2015 and will help Lee to achieve its stated goal of strong
and stable cash flows in 2015 and beyond.
Newspaper publishing industry consolidation
Most importantly, while the strong cash flow, the growing
revenue components, and the long-dated debt maturity schedule of
Lee are attractive characteristics for any company in any industry,
Wingspan believes them to be particularly valuable in the current
environment of industry consolidation that the newspaper publishing
industry finds itself in today. Wingspan has full trust that
Lee's experienced management team would evaluate all options and
make prudent decisions for the benefit of its shareholders.
Established relationship between Lee and Wingspan
Wingspan and its investment team have an established history
with Lee as an investor in both its debt and equity. Prior to
forming Wingspan, while at a prior employer, members of the
investment team of Wingspan played an integral role in Lee's
restructuring process completed in 2012. In 2014, Wingspan
was an anchor investor in Lee's successful refinancing and became
one of Lee's largest shareholders as shown in today's filing.
About Wingspan Investment Management, LP
Wingspan
Investment Management, LP is a New
York-based investment firm founded in 2013 by Buck Ratchford. Prior to founding
Wingspan, Mr. Ratchford was a Partner at Goldman Sachs and the Head
Portfolio Manager of a proprietary investing business within
Goldman Sachs' Global Credit division from 2003-2011.
Wingspan's long/short investing strategy focuses on leveraged
corporate capital structures and targets opportunities across
performing, stressed, and distressed credit as well as special
situation equities. The Fund's strategy is global in scope
with an emphasis on North American and European markets.
This press release is for general informational purposes
only. It does not have regard to the specific investment
objective, financial situation, suitability or particular need of
any specific person who may receive this press release, and should
not be taken as advice on the merits of any investment decision.
The views expressed herein represent the opinions of
Wingspan, and should not be viewed as indicating the support of
any other party, including the Company.
There is no assurance or guarantee with respect to
the prices at which any securities of the Company will trade, and
such securities may not trade at prices that may be implied
herein. The projections set forth herein are based on
assumptions that Wingspan believes to be reasonable, but there can
be no assurance or guarantee that actual results or performance of
the Company will not differ, and such differences may be material.
Wingspan reserves the right to change any of its opinions
expressed herein at any time as it deems appropriate,
and disclaims any obligation to update the information
contained herein including, without limitation, the manner or type
of any Wingspan investment.
Private investment funds advised by Wingspan currently hold
shares of the Company's common stock. Wingspan and
such investment funds reserve the right to take any
actions with respect to their investments in the Company as they
may deem appropriate.
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SOURCE Wingspan Investment Management, LP