MCLEAN, Va. (Aug. 6, 2014) — Gannett Co. Inc., which publishes USA Today, plans to spin off its publishing business in a deal that includes taking over full ownership of its Cars.com online vehicle shopping website.
Gannett said it will acquire the 73-percent interest it does not already own in Classified Ventures L.L.C., which owns Cars.com, for $1.8 billion in cash.
The transactions will create two publicly traded companies—with one exclusively focusing on Gannett's broadcasting and digital businesses and the other on its publishing business.
The planned separation of the publishing business will be implemented through a tax-free distribution of Gannett's publishing assets to shareholders. “The transaction will create two focused companies with increased opportunities to grow organically across all businesses as well as pursue strategic acquisitions,” Gannett said.
Gannett said it will finance the acquisition through cash on hand, the issuance of approximately $650 million to 675 million in new senior notes, and borrowings under the company's revolving credit agreement.
Gracia Martore, Gannett's president and CEO, said “the bold actions…are significant next steps in our ongoing initiatives to increase shareholder value by building scale, increasing cash flow, sharpening management focus, and strengthening all of our businesses to compete effectively in today's increasingly digital landscape.