Freshly spun-out Tribune Publishing signs 5-year deal with Classified Ventures, now owned by Gannett
Deal will allow Tribune Publishing to continue to sell Cars.com products and services exclusively in the eight key markets the new publishing company serves
CHICAGO, Illinois – August 5, 2014 — Tribune Publishing Company today announced that it expects to enter into a five-year agreement with Classified Ventures, LLC to extend its affiliate agreement with Cars.com. The agreement is contingent upon the closing of the sale of CV to Gannett Co., Inc. (NYSE: GCI) by the equity partners, which is expected to close by the end of 2014, subject to customary regulatory reviews.
“We’ve had a long and mutually beneficial relationship with Cars.com and this agreement ensures auto dealers in key markets will continue to benefit from the scale and reach of our prominent print and digital properties.”
Upon the close of the sale, Tribune Publishing will enter into a five-year affiliate agreement with CV that will allow it to continue to sell Cars.com products and services exclusively in the eight key markets in which Tribune Publishing operates, including: Los Angeles; Chicago; Central- and South Florida; Baltimore; Hartford, Ct.; Allentown, Pa. and Newport News, Va.
CV, whose primary asset is the online car shopping website Cars.com, is a joint venture among A. H. Belo, The McClatchy Company, Tribune Media Company, Graham Holdings Company and Gannett Co., Inc. The equity partners have entered into a definitive agreement to sell their entire stake in CV to Gannett. Tribune Publishing Company is not an equity partner and will not receive proceeds from the sale.
“Upon closing, this agreement will represent significant recurring revenue for our digital classified business,” said Jack Griffin, Chief Executive Officer of Tribune Publishing. “We’ve had a long and mutually beneficial relationship with Cars.com and this agreement ensures auto dealers in key markets will continue to benefit from the scale and reach of our prominent print and digital properties.”
Meanwhile, the old owners of Classified Ventures, who sold their interests to Gannett, will be announcing their divestures. Here is the one from Graham Holdings, the old Washington Post Company, which has been selling off assets and a fast pace:
WASHINGTON, DC – August 5, 2014 — Graham Holdings Company said today that the Company and its partners have entered into an agreement to sell their stake in Classified Ventures (CV) to Gannett Co., Inc. for a price that values CV at $2.5 billion. Gannett currently owns a 27% share of CV; Graham Holdings owns a 16.5% share. The transaction is expected to close before the end of 2014, subject to regulatory review.
CV, whose primary asset is www.cars.com, is a joint venture among A.H. Belo Corp., Gannett, Graham Holdings, McClatchy and Tribune Company.
Here is more fallout from the spin-off of Tribune newspapers: Tribune Media, the broadcast arm of the company gets to sell off its stake in Classified Ventures and keep its money.
CHICAGO, Illinois – August 5, 2014 — Tribune Media Company TRBAA +1.69% today announced that together with the remaining partners in Classified Ventures, LLC (CV), it has entered into a definitive agreement to sell its entire stake in CV to Gannett Co., Inc. for a price that values CV at $2.5 billion. The transaction is expected to close before the end of 2014, subject to normal regulatory reviews.
CV, whose primary asset is the online car shopping website Cars.com, is a joint venture among Tribune Media, McClatchy, Gannett, Graham Holdings Company and A. H. Belo Corporation. Tribune Media owns 27.8% of CV. Gannett has agreed to buy each of the other partners’ interests in CV and acquire full ownership.
CV was valued at $2.5 billion for purposes of the transaction, which represents a multiple of 14.6 times 2014 pro forma EBITDA, with gross proceeds of $1.8 billion to selling partners. Tribune Media estimates its pre-tax, cash proceeds will be $686 million. After-tax proceeds are anticipated to be approximately $425 million. Tribune Media expects to record a gain on the sale of its interest in CV in the quarter that the deal closes.
Prior to closing, CV is expected to make a final distribution of all cash on hand from operations to the current owners. Tribune Media’s portion of this distribution is expected to be approximately $4 million, which is in addition to the amounts detailed above.
The company expects to use the proceeds from this transaction for general corporate purposes.
“We are proud of Tribune’s role in building cars.com over the years and we are pleased today to be providing a significant return on that investment for our shareholders through this transaction,” said Peter Liguori, Tribune Media’s president and chief executive officer.
Moelis & Company served as financial advisors and Skadden, Arps, Slate, Meagher & Flom provided legal counsel to CV on this transaction.