Newcastle Investment Corp bought a group of News Corp newspapers, formerly known as the Ottaway chain, for $87 million including $33 million of debt, the company said on Wednesday.
News Corp announced the sale on Tuesday, but did not disclose the terms of the deal.
The transaction includes Dow Jones Local Media's 33 community newspapers as well as the Cape Cod Times in Hyannis, Massachusetts, and The Pocono Record in Stroudsburg, Pennsylvania.
The sale of the group has been in the works by Rupert Murdoch's News Corp ever since 2007 when it acquired Dow Jones, which also publishes The Wall Street Journal. Murdoch quickly put the local papers on the block, but it was right as the financial crisis hit and the market for newspaper transactions dried up.
Newcastle is an affiliate of investment management group Fortress Investment Group. GateHouse Media, a chain of more than 400 community newspapers in the United States and also an affiliate of Fortress, is managing the Dow Jones acquisition.
In addition, Newcastle, which owns about 52 percent of GateHouse's $1.2 billion of debt, plans to restructure the debt under Chapter 11 bankruptcy protection, citing an agreement with creditors that would allow it to convert its debt to equity under a prearranged bankruptcy filing.
(Reporting by Jennifer Saba in New York, editing by G Crosse)