Lee Enterprises Secures $50M Strategic Equity Investment Led By David Hoffmann Via Private Placement Of Common Stock At $3.25/Share, To Strengthen Balance Sheet And Cut Debt Costs

Lee Enterprises, Incorporated (NASDAQ:LEE) today announced that it has entered into a definitive stock purchase agreement for a $50 million strategic equity investment in the Company's common stock. The investment is led by David Hoffmann ("Hoffmann"), with participation from other existing investors in the Company, providing the Company with committed capital and a strengthened financial and governance foundation as it moves into its next phase.

Under the agreement, the Company has entered into a $50 million private placement of common stock at an investment price of $3.25 per share anchored and fully backstopped by Hoffmann, who initially committed a minimum of $20 million, with the remaining $30 million allocated to other top existing investors. As a result of the subscription levels and backstop, at signing, Hoffmann has committed approximately $35 million, with additional investors committing approximately $15 million. Also, Hoffmann has backstopped the capital raise by fully committing to purchase any remaining amount of common stock to the extent not purchased by any additional investors at the closing of the transaction. Subject to customary closing conditions and stockholder approval, the Company expects to receive the full $50 million of gross proceeds at the closing of the transaction, before transaction expenses.

The closing of the $50 million investment is expected to satisfy a condition to amend the Company's existing credit facility, reducing the annual interest rate on approximately $455.5 million of the Company's outstanding long-term debt to 5% from 9% for a five-year period, materially improving the Company's capital structure and cash flow outlook.

Following a comprehensive review of the Company's performance, capital structure, and long-term opportunities, the Company's board of directors (the "Board") unanimously approved the transaction and determined that decisive action was required. The Board concluded that strengthening the balance sheet, implementing leadership change, and advancing a clear strategic direction are necessary to improve execution and position the Company for long-term value creation.