Gannet drives off with Cars.com
At the cost of $1.8B, Gannet Company has gone from a 27% to a 100% interest in car shopping site Cars.com. The site was originally a joint venture of Tribune Media, McClatchy, Gannett, Graham Holdings Company and A. H. Belo Corporation.
The name of the Cars.com umbrella company that is actually being acquired is Classified Ventures LLC.
The site is one of the leaders providing consumers with a place to research and shop for cars, drawing about 30,000,000 visitors per month.
Gracia Martore, president and chief executive officer, said, “We are thrilled to be the sole owner of Cars.com – a business that we know extremely well, and one with terrific growth characteristics. Since its inception in 1998, Cars.com has evolved from a business that simply supported the publishing markets of its owners into a strong, stand-alone digital business serving approximately 20,000 dealers and generating estimated pro forma 2014 revenue of approximately $535 million. Additionally, from 2006 to 2013, Cars.com revenue grew at a compound annual growth rate (CAGR) of almost 20%, while EBITDA increased at a CAGR of almost 40% over the same period. Cars.com is a company with an outstanding product suite and a keen ability to listen to its customers and deliver innovations that set it apart – both of which have contributed to this tremendous growth.”
Martore continued, “With full ownership of Cars.com, we will be able to drive even faster growth as marketers and advertisers continue to shift more of their spending toward digital solutions. This acquisition represents another pivotal step in our ongoing transformation, positioning us well for Gannett’s planned separation into two publicly-traded companies, which is expected to be completed in mid-2015.”
Tribune Media announced its compensation in the deal, based on its sale of a 27.8% stake in CV. It said in a release, “Proceeds to Tribune Media, net of transaction costs paid by CV were $686 million, $28 million of which will be held in escrow until Oct. 1, 2015. After tax proceeds to Tribune Media are expected to be $424 million. Prior to the transaction closing, CV distributed $6.5 million to Tribune Media related to cash accumulated from earnings from CV.”