Journal Communications to spin off Norlight
Laptop Battery By Joe Vanden Plas • 04/26/06 Milwaukee Journal Communications, Inc. has set in motion its plans to spin-off Norlight, its telecommunications subsidiary, to shareholders. The transaction could take up to six months to complete.
The spin-off will be completed through a pro-rata distribution of Norlight's shares to shareholders of Journal Communications. Steven J. Smith, chairman and chief executive officer of Journal Communications, said establishing two independent companies would position each to better focus on their core businesses. Journal Communications owns diverse local media businesses - including the Milwaukee Journal Sentinel, and WTMJ Radio and Television - while Norlight, which will become an independent, publicly traded company, provides telecommunications services to area businesses.
James J. Ditter, president of Norlight, noted that the company has been managed as part of Journal Communications, and has conducted business with an emphasis on annual free cash flow generation. He said its separation from Journal Communications will provide the flexibility to compete more effectively in targeted markets, and take advantage of growth opportunities in areas like Voice over IP, managed security, and its new premise-based IP telephony system.
To pave the way for the separation, Journal Communications will submit a request to the Internal Revenue Service seeking a private-letter ruling as to the tax-free nature of the spin-off, and Norlight will file a registration statement with the Securities and Exchange Commission.
Completion of the spin-off is subject to the effectiveness of the registration statement and a ruling that the spin-off will qualify as a tax-free transaction for Journal Communications and its shareholders. The company said it would announce the record date, the distribution date, and the distribution ratio at a later time.
Norlight is expected to apply for listing on the NASDAQ Global Market (formerly the NASDAQ National Market).
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