Details Strategy and Capital Allocation Plans for Publishing
Company and Broadcasting & Digital Company
Separation Remains on Track for Mid-2015
MCLEAN, Va.--(BUSINESS WIRE)--Mar. 12, 2015--
Gannett Co., Inc. (NYSE: GCI) announced that its subsidiary, Gannett
SpinCo, Inc., today filed a Form 10 Registration Statement with the U.S.
Securities and Exchange Commission (“SEC”) in connection with Gannett's
previously announced plan to separate into two publicly traded
companies, a publishing company under the current Gannett name and a
broadcasting and digital company under a new name. The planned
separation, which will be effected through a tax-free dividend of shares
in the publishing company to existing Gannett shareholders, is on track
to be completed in mid-2015.
Gracia Martore, president and chief executive officer, said, “The filing
of the registration statement for the publishing business is a key step
forward in completing our separation, which will create two sharply
focused, independent companies with enhanced flexibility to align their
strategies and resources with their growth profiles and priorities.”
With the largest network of local publications and related digital
assets in the U.S., the nation’s #1 daily publication by circulation, a
leading regional publisher in the U.K., and exceptional journalistic
talent, the publishing company will deliver unparalleled news and
information on multiple platforms as well as innovative solutions for
advertisers. The new Gannett will have a virtually debt-free balance
sheet, strong cash flow, and commitment to financial discipline, making
it uniquely positioned to pursue consolidation opportunities of local
market publishing operations while maintaining the ability to invest in
products and services that will drive growth.
Bob Dickey, who will be president and chief executive officer of the
publishing company, said, “While the publishing business and its related
digital assets will be spun off as a new publicly traded company, it is
a long-established industry leader, rooted in journalistic excellence
and innovation, and it will continue to operate under the Gannett name.
We are incredibly excited to turn the page to this next chapter in
Gannett’s storied, 108-year history.”
Gracia Martore will be president and chief executive officer of the
broadcast/digital company, which will also continue to be an industry
leader, with a portfolio of 46 owned or serviced television stations
covering more than 35 million households, and robust, leading-edge
digital businesses with unparalleled offerings including Cars.com and a
majority stake in CareerBuilder.com.
The publishing company will benefit from a continued commercial
relationship with the broadcast/digital company. Following the
separation, the publishing company will maintain ongoing market
affiliation agreements with CareerBuilder, Cars.com and G/O Digital,
providing additional revenue streams, as well as permissible shared
service agreements with the broadcast/digital company that will enable
content-sharing and scaled advertising revenue opportunities.
Martore continued, “The separation provides each company with enhanced
strategic, operating, financial, and regulatory flexibility to drive
growth and unlock shareholder value. Each company will have a robust
capital allocation plan reflective of its strong positioning, and
together their expected dividend and share repurchase programs will be
larger than Gannett’s today.”
Capital Allocation Plans
As outlined in the Form 10, the publishing company expects to pay a
regular cash dividend of $0.32 per share annually (subject to adjustment
based on the final distribution ratio), and plans to commence a $150
million share repurchase program expected to be used over a three-year
period.
The broadcasting/digital company will also continue Gannett’s focus of
delivering strong returns to shareholders. It expects to pay a regular
cash dividend of $0.56 annually which, combined with the publishing
company’s anticipated dividend, represents a 10% increase over the
current Gannett dividend. The broadcasting/digital company also plans to
replace its existing share repurchase program with a new $750 million
authorization expected to be used over the three-year period after the
separation. This expected new authorization, combined with the
publishing company’s authorization, represents more than a doubling of
the current Gannett share repurchase program.
Under the current plan, both companies will have leverage levels well
below peer companies and will maintain the flexibility to adjust
repurchases based on business conditions, new opportunities, and other
factors.
The separation remains subject to customary conditions, including the
effectiveness of the Form 10 Registration Statement filed today. The
Form 10 is available in the Investor Relations section on Gannett’s
website, www.gannett.com.
Greenhill & Co. is acting as financial advisor on the separation and
Wachtell, Lipton, Rosen & Katz is acting as legal advisor.
Forward Looking Statements
Any statements contained in this communication that do not describe
historical facts may constitute forward-looking statements as that term
is defined in the Private Securities Litigation Reform Act of 1995,
including the potential distribution of Gannett’s Publishing business to
its shareholders and the expected financial results of the two companies
after the separation. Any forward-looking statements contained herein
are based on our management's current beliefs and expectations, but are
subject to a number of risks, uncertainties and changes in
circumstances, which may cause actual results or company actions to
differ materially from what is expressed or implied by these statements.
There is no assurance as to the timing of the spin-off or whether it
will be completed. Economic, competitive, governmental, technological
and other factors and risks that may affect Gannett’s operations or
financial results are discussed in our Annual Report on Form 10-K for
the fiscal year ended December 28, 2014, and in subsequent filings with
the U.S. Securities and Exchange Commission. We disclaim any obligation
to update these forward-looking statements other than as required by law.
About Gannett
Gannett Co., Inc. (NYSE: GCI) is an international media and marketing
solutions company that informs and engages more than 115 million people
every month through its powerful network of broadcast, digital, mobile
and publishing properties. Our portfolio of trusted brands offers
marketers unmatched local-to-national reach and customizable, innovative
marketing solutions across any platform. Gannett is committed to
connecting people – and the companies who want to reach them – with
their interests and communities. For more information, visit www.gannett.com.
Source: Gannett Co., Inc.
Gannett Co., Inc.
For media inquiries, contact:
Jeremy
Gaines
Vice President, Corporate Communications
703-854-6049
jmgaines@gannett.com
or
Sard
Verbinnen & Co.
George Sard/Stephanie Pillersdorf/Pamela Blum
212-687-8080
or
For
investor inquiries, contact:
Jeffrey Heinz
Vice President,
Investor Relations
703-854-6917
jheinz@gannett.com
