05 Aug Tribune Media Company Announces Agreement to Sell its 27.8% Stake in Classified Ventures to Gannett
Tribune Media Company (OTC:TRBAA) 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.
Tribune Media Company (OTC:TRBAA) is home to a diverse portfolio of television and digital properties driven by quality news, entertainment and sports programming. Tribune Media is comprised of Tribune Broadcasting’s 42 owned or operated local television stations reaching 50 million households, national entertainment network WGN America, available in 72 million households, Tribune Studios, and Tribune Digital Ventures, including the websites Zap2it and TVByTheNumbers, and Gracenote, one of the world’s leading sources of TV and music metadata powering electronic program guides in televisions, automobiles and mobile devices. Tribune Media also includes Chicago’s WGN-AM, the national multicast networks Antenna TV and THIS TV. Additionally, the company owns and manages a significant number of real estate properties across the U.S. and holds other strategic investments in media.