On Tuesday, Lee Enterprises revealed a strategic agreement with billionaire investor David Hoffmann, who had earlier proposed acquiring the nation’s third-largest newspaper chain. The deal involves Hoffmann infusing $50 million into the company, aiming to fortify its financial standing and pave the way for future growth.

Hoffmann, through his family investment firm that already owns over 40 publications, will step into the role of Lee’s chairman. His ambition is to ascend as the top newspaper publisher in the country. In recent discussions, Hoffmann has expressed confidence in newspapers’ potential to remain vital sources for local news while successfully transitioning to a digital subscription model.

Upon Hoffmann’s takeover, Lee confirmed that CEO Kevin Mowbray, who has been with the Davenport, Iowa-based firm for 39 years, will step down. The company owns significant titles such as the St. Louis Post-Dispatch, Buffalo News, and Omaha World-Herald, among numerous others across 25 states.

“With enhanced financial footing and a solid governance structure, the emphasis can now shift to strategic execution and the creation of long-term value,” Hoffmann stated, choosing not to elaborate further on the agreement.

Hoffmann initially amassed his wealth through DHR Global, an executive search firm he founded. Following this, he established his investment fund, which now boasts ownership of over 125 brands and a workforce of 22,000. Next year, his firm is also set to become the majority owner of the Pittsburgh Penguins.

The test will be whether Hoffmann and Lee reinvest in newsrooms to strengthen coverage of high school sports and other local institutions like he has talked about after he takes over, said Tim Franklin, a professor and chair of local news at Northwestern University’s Medill School of Journalism.

In recent years Lee — like many news companies — has cut staff and sold off some of the real estate its newspapers own as advertising and website traffic declined. Many Lee publications also stopped printing on Mondays.

The company also struggled with $455.5 million of debt taken on when it bought Warren Buffett’s newspapers from Berkshire Hathaway and refinanced its existing debt. Lee said the new infusion from Hoffmann and other investors will allow it to reduce the interest rate on that debt from 9% to 5% and to save about $18 million a year.

“Lee’s back was up against the wall. And I think it was looking for a way to stabilize the business,” Franklin said.

Buffett and incoming Berkshire CEO Greg Abel did not respond to questions Tuesday, but before selling off Berkshire’s newspapers, Buffett concluded the industry was “toast” and destined for an unending decline.

Unlike when Lee fought off a takeover bid from the Alden Global hedge fund three years ago, the publisher’s board has embraced Hoffmann’s approach.

Hoffmann agreed to buy $35 million of new Lee stock at $3.25 per share to go along with the 9.8% of the company’s stock he already controlled. Other investors will put up $15 million.

Lee shares soared more than 20% Tuesday to close at $4.50 after the news was announced.

“The question is going to be, is Hoffmann going to make that investment in original unique local reporting that will drive digital subscriptions, which he seems to believe is a cornerstone of his business model,” Franklin said.