This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Gannett Latest To Hive Off Publishing Business

NEW YORK (The Deal) -- Gannett (GCI) is joining the roster of media groups that have split off their publishing units, the owner of USA Today said Tuesday.

The company will spin off the newspaper business to shareholders and will pay $1.8 billion for the 73% stake that it does not own in joint venture Classified Ventures, which owns Cars.com.

Gannett CEO Gracia Martore described the transactions as a "one-two punch" in a Monday conference call. Shares of Gannett gained 11 cents, or 0.3%, to $34.43 on Tuesday morning.

Following the deal, Gannett's newspapers will be "virtually debt free," Martore said. The TV stations and digital media assets such as Cars.com will have about $4.6 billion in debt. Martore said the deals would provide the businesses with greater strategic freedom. "Each will be able to make acquisitions in consolidating industries," she told investors.

TheStreet's Jim Cramer gives viewers his take on Gannett's latest move:


WATCH: More videos from Jim Cramer on TheStreet TV | More videos from Jim Cramer

Gannett is paying 11.7 times projected 2014 Ebitda for Classified Ventures, which is a joint venture with Tribune Media (TRBAA), McClatchy (MNI), Graham Holdings (GHC) and A. H. Belo (AHC). The payout comes to 9.2 times projected 2015 Ebitda.

The deal values Classified Ventures as a whole at $2.5 billion, or 14.6 times 2014 Ebitda, according to press releases from Tribune and A.H. Belo.

Publishing spins are in vogue among media groups.

On Monday, Tribune Media completed a split with its newspaper group, which owns the Chicago Tribune and Los Angeles Times. Tribune Publishing (TPUB) began trading on the New York Stock Exchange on Tuesday, dropping 57 cents, or 2.6%, to $21.56.

E.W. Scripps (SSP) and Journal Communications (JRN) said in late July that they would merge and then separate their TV and newspaper businesses.

Time Warner (TWX) divested Time (TIME) magazine publishing business in June. News (NWSA) broke away from 21st Century Fox  (FOXA) in June 2013. Media General MEG sold most of its newspapers to Warren Buffett's Berkshire Hathaway (BRK.A) in 2012.

Advising Gannett on the spin were Greenhill (GHL) and Wachtell Lipton Rosen & Katz lawyers Ed Herlihy, Igor Kirman and David Lam.

For the purchase of the Classified Ventures stake, Gannett retained Greenhill, Citigroup (C) and a Nixon Peabody team including John Partigan, Dan McAvoy, Christian McBurney, Brian Kopp and Gordon Lang.

Moelis  (MC) bankers Navid Mahmoodzadegan, John Momtazee and Carlos Jimenez advised Classified Ventures, which received counsel from Skadden, Arps, Slate, Meagher & Flom LLP lawyers Rodd Schreiber and Joseph Graves.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,461.32 -153.49 -0.92%
S&P 500 1,927.11 -14.17 -0.73%
NASDAQ 4,382.8470 -36.6310 -0.83%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs