Deal Will Further Enhance ReachLocal’s Intelligent, Data-Driven
Digital Marketing Solutions
Gannett Co., Inc. (“Gannett” or “company” or “we”) (NYSE:GCI),
announced today that it entered into an agreement to acquire
WordStream, Inc. (“WordStream”), a provider of cloud-based
software-as-a-service (SaaS) solutions for local and regional
businesses and agencies to optimize their digital marketing
services campaigns. The purchase price is $130 million in cash, net
of cash acquired, plus up to an aggregate $20 million earnout
payable in 2019 and 2020 based on achieving certain revenue
targets. The transaction builds upon Gannett’s existing data-driven
digital marketing services, ReachLocal and SweetIQ.
“This acquisition marks another critical milestone in Gannett’s
digital transformation, enhancing our ability to support businesses
and agencies in our local markets with the intelligent, data-driven
marketing solutions they need to drive growth,” said Robert Dickey,
president and chief executive officer of Gannett. “WordStream’s
technology, extensive data and analytics capabilities together with
an experienced executive team will bring tremendous value to
Gannett’s expanding digital marketing services business.”
In the first year, WordStream is forecasted to contribute
approximately $55 million in digital marketing services revenue and
approximately $16 million of Adjusted EBITDA. Gannett anticipates
the transaction will be accretive in the first full year of
operations and funded from borrowings under the Company’s revolver.
The acquisition is expected to close in the second quarter after
the expiration or earlier termination of the waiting period under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the satisfaction of other customary closing
conditions.
WordStream helps thousands of businesses to harness the power of
Google, Facebook and Bing by leveraging its discovery and
recommendation technologies, intelligent campaign optimization, and
online training programs in its cloud-based SaaS solutions. These
Do-It-Yourself (DIY) solutions provide businesses and agencies the
ability to manage and optimize performance and results on paid
search and social advertising campaigns. WordStream is a proven
innovator and delivers a world-class customer experience. Through
WordStream, ReachLocal and SweetIQ, Gannett will now be able to
provide the full spectrum of digital marketing services from DIY to
managed service to any local or regional business or agency.
WordStream will continue to be headquartered in Boston, MA.
“The market for digital marketing services in the U.S. is over
$90 billion and consists of both large and small clients. The
addition of WordStream’s best-in-class DIY SaaS solutions
significantly enhances our capabilities and expands our addressable
market,” said Sharon Rowlands, president of USA TODAY NETWORK
Marketing Solutions and chief executive officer of ReachLocal.
“WordStream enables us to provide a full range of digital marketing
solutions to Gannett’s large local client base and grow our digital
share of wallet.”
“WordStream is very excited about the opportunity this
acquisition provides our customers and employees,” said Howard
Kogan, chief executive officer at WordStream. “We see tremendous
opportunity to leverage our companies’ combined data, analytics and
marketing technologies to enhance the capabilities that WordStream
brings to the DIY market, thereby accelerating our ability to drive
further success and growth for our customers.”
Jefferies LLC acted as exclusive financial advisor and Skadden,
Arps, Slate, Meagher & Flom LLP acted as legal advisor to
Gannett in connection with this transaction. Houlihan Lokey acted
as exclusive financial advisor and Gesmer Updegrove acted as legal
advisor to WordStream in connection with this transaction.
About Gannett
Gannett Co., Inc. (NYSE:GCI) is an innovative, digitally
focused media and marketing solutions company committed to
strengthening communities across our network. With an unmatched
local-to-national reach, Gannett touches the lives of more than 117
million people monthly with our Pulitzer-Prize winning content,
consumer experiences and benefits, and advertiser products and
services. Gannett brands include USA TODAY NETWORK with the iconic
USA TODAY and more than 100 local media brands, digital marketing
services companies ReachLocal and SweetIQ, and U.K. media company
Newsquest. To connect with us, visit www.gannett.com.
About WordStream, Inc.
WordStream, Inc. provides software and services that help
marketers get the maximum results from their online marketing
efforts. WordStream’s easy-to-use software allows for more
effective paid search and social campaigns with the 20-Minute Work
Week, a customized workflow that guides marketers through steps
that can greatly improve their AdWords, Bing, and Facebook
campaigns, plus tools for call tracking, keyword optimization, and
more. WordStream also offers an award-winning PPC tool, the AdWords
Performance Grader, which evaluates users' Google AdWords accounts
and provides valuable tips for improvement. WordStream holds
premier partner status with Google and Bing ad networks. More
information can be found at www.wordstream.com.
FORWARD LOOKING STATEMENTS
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements include all statements that are
not historical facts. Such statements include, but are not limited
to, Gannett and WordStream’s ability to satisfy the conditions to
the merger and consummate the merger on a timely basis, Gannett’s
ability to integrate WordStream’s operations and employees with
Gannett’s existing business, and economic and other uncertainties
affecting the digital advertising industry generally. The words
"believe," "expect," "estimate," "could," "should," "intend,"
"may," "plan," "seek," "anticipate," "project" and similar
expressions, among others, generally identify forward-looking
statements, which speak only as of the date the statements were
made and are not guarantees of future performance. The matters
discussed in these forward-looking statements are subject to many
risks, trends, uncertainties, and other factors that could cause
actual results to differ materially from those projected,
anticipated, or implied in the forward-looking statements. Where,
in any forward-looking statement, an expectation or belief as to
future results or events is expressed, such expectation or belief
is based on the current plans and expectations of our management,
is expressed in good faith and is believed to have a reasonable
basis. However, there can be no assurance the expectation or belief
will result, be achieved or be accomplished. Whether or not any
such forward-looking statements are in fact achieved will depend on
future events, some of which are beyond our control. Except as may
be required by law, we undertake no obligation to modify or revise
any forward-looking statements to reflect new information, events,
or circumstances occurring after the date of this press release.
Factors, risks, trends, and uncertainties that could cause actual
results or events to differ materially from those projected,
anticipated, or implied include the matters described under the
heading "Risk Factors" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in our Annual Report
on Form 10-K for the year ended December 31, 2017 and in our other
SEC filings.
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For investor inquiries:Stacy Cunningham, 703-854-3168Vice
President, Financial Planning & Investor
Relationsinvestors@gannett.comorThe Blueshirt GroupBrinlea
Johnsoninvestors@gannett.comorFor media inquiries:Amber
Allman, 703-854-5358Vice President, Corporate Events &
Communicationsaallman@gannett.com
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