SaltWire lawsuit alleges Transcontinental inflated news companies’ earnings, dealing publisher ‘very significant blow’

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Transcontinental said the assets were expected to generate more than $12.6 million in EBITDA, but SaltWire says they actually dropped by $9 million

Atlantic Canada’s largest newspaper publisher says it overpaid when it purchased a number of publications and printing presses from Transcontinental and has suffered “significant damages and loss” as a result of the deal.

According to SaltWire’s statement of claim, Transcontinental provided it with a prospectus slide presentation in October 2016, highlighting the media assets Transcontinental wanted to sell. “The drop off in EBITDA was both unexpected and damaging,” said Ian Scott, SaltWire’s chief operating officer, in an interview. Revenue was also “markedly lower” than predicted, he added.

“It’s been a very significant blow to SaltWire,” he added. “We paid more than should have been paid.” SaltWire is seeking unspecified damages. None of its allegations have been proven in court. According to Scott, Deloitte aided the due diligence process, but SaltWire was not permitted to inspect all the physical assets, including the printing press in Sydney, N.S. Problems later emerged at all three printing presses, Scott says. Other components of the deal were plagued by “significant problems,” the court documents said.

 

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