Will Also Evaluate Strategic Alternatives for CareerBuilder
Gracia Martore to Retire as TEGNA President and CEO upon Close of
Spin-off; Dave Lougee to Become CEO & President of TEGNA; Alex Vetter to
Serve as CEO & President of Cars.com
MCLEAN, Va.--(BUSINESS WIRE)--Sep. 7, 2016--
TEGNA Inc. (NYSE:TGNA) today announced it intends to spin-off Cars.com
from TEGNA, creating two independent publicly traded companies: TEGNA,
the largest independent broadcast station group among major network
affiliates in the top 25 markets, and Cars.com, a top online destination
in the digital automotive marketplace. TEGNA also announced that it is
evaluating strategic alternatives for CareerBuilder, a global leader in
human capital solutions.
Additionally, TEGNA announced that Gracia C. Martore, president, chief
executive officer and a member of the Board of Directors of TEGNA, will
retire upon the closing of the spin-off, which is expected to take place
in the first half of 2017.
Spin-off Transaction
As a result of the planned spin-off, which is expected to be tax-free to
TEGNA shareholders, TEGNA and Cars.com will be positioned to take
advantage of differentiated opportunities in the rapidly evolving
broadcast and digital landscapes. Both will have balance sheets and
capital return policies tailored to their specific business
characteristics, which are expected to result in increased growth
opportunities and appropriate market valuations. The spin-off of
Cars.com from TEGNA is also expected to improve management fit and focus
at both companies.
Gracia Martore, TEGNA president and chief executive officer, said, “Over
the last four and a half years, we’ve taken a series of important
strategic steps to increase the value of our businesses, including the
acquisition of broadcast stations from Belo Corp. and London
Broadcasting, the acquisition of full ownership of Cars.com, and the
spin-off of the Gannett publishing business. The spin-off we are
announcing today is the next logical step in our ongoing transformation
to best position our market-leading businesses and continues our strong
track record of creating value for shareholders.”
Martore continued, “Spinning off Cars.com from TEGNA will establish two
strong, industry-leading companies that are well positioned to compete
and to continue to profitably grow in their targeted markets. Each
business will have increased strategic, operating, and financial
flexibility at a time when the broadcast and digital sectors are both
rapidly evolving – presenting both companies with a wealth of
opportunities. Cars.com will have the flexibility to invest in further
organic growth and to participate in the active digital automotive M&A
market, and TEGNA will have a strong balance sheet and cash flow to
continue to pursue investment in organic growth and opportunistic
acquisitions and to provide an optimal mix of capital returns to
shareholders. We are fortunate to have strong CEOs for both companies,
and we believe this is the right time to separate in order to unlock
potential shareholder value both in the near term and over time as they
develop independently as two separate pure-play companies. Additionally,
while our 53% majority interest in CareerBuilder will remain with TEGNA,
we, along with our partners Tribune Media and McClatchy, believe it also
makes sense to evaluate strategic alternatives for this business given
its recent evolution.”
Marge Magner, chairman of the Board, said, “We have created this
opportunity by executing on a strategy to build scaled TEGNA businesses,
and we are in an excellent position to take the next steps to maximize
value for our shareholders. We believe that by providing these two
strong companies, Cars.com and TEGNA, with a greater ability as separate
companies to focus on their unique characteristics and opportunities,
both companies will be poised to accelerate their growth strategies,
allowing us to continue our value-enhancing evolution.”
TEGNA’s management team will develop detailed separation plans for
consideration by the Board of Directors over the coming months.
Completion of the spin-off will be subject to certain conditions,
including receipt of final Board approval, receipt of an opinion from
tax counsel regarding the tax-free nature of the distribution, and the
effectiveness of a Form 10 registration statement, which is expected to
be filed with the Securities and Exchange Commission later today. The
distribution to TEGNA shareholders of shares of a new entity holding the
Cars.com business is expected to be completed in the first half of 2017.
TEGNA will temporarily suspend its share repurchase program pending
completion of the spin-off. There can be no assurance regarding the
ultimate timing of the proposed transaction or that it will be completed.
Cars.com
Following the spin-off, Cars.com will remain headquartered in Chicago,
Illinois and will trade under the ticker symbol CARS.
The automotive sector is the single largest and most important vertical
for local advertising revenue, and Cars.com is one of the few proven and
established digital solutions of scale in this market. TEGNA anticipates
that the planned spin-off would result in a trading multiple for
Cars.com that is commensurate with other pure-play digital companies,
greater flexibility to pursue merger and acquisition opportunities, and
benefits associated with aligning capital structure and allocation with
specific business needs and opportunities. As an independent company,
Cars.com will be able to focus more sharply on its key strategic
priorities, including rapid innovation within a growing marketplace and
active evaluation and pursuit of acquisitions to open up new, adjacent
opportunities.
TEGNA
TEGNA will remain headquartered in McLean, Virginia, and will continue
to trade on the NYSE under the symbol TGNA.
As an independent, leading broadcast company, TEGNA will benefit from
dedicated focus on opportunities specific to broadcasting, including
further innovation around programming and content, investments in
adjacent businesses and acquisitions. It will also continue to be well
positioned to manage and benefit over time from ongoing developments in
connection with sector-specific issues, such as spectrum, retransmission
fees and over-the-top opportunities. The Company’s current debt will
remain with TEGNA. TEGNA expects to receive from Cars.com a one-time
cash dividend immediately prior to the spin-off that will be used to
maintain TEGNA’s sound credit rating. Following the spin-off, TEGNA
expects to continue to pay shareholders a strong regular dividend, with
the initial rate to be determined prior to the completion of the
spin-off.
The Broadcasting business, which includes 46 television stations owned
or serviced by TEGNA, is the largest independent station group of major
network affiliates in the top 25 markets. Its stations reach
approximately one-third of all television households nationwide and
constitute the #1 NBC affiliate group, #1 CBS affiliate group and #4 ABC
affiliate group (excluding owner-operators). G/O Digital, which provides
a suite of scalable, localized digital marketing solutions to small and
medium-sized businesses, as well as franchises and businesses with
multiple locations, will remain with TEGNA following completion of the
spin-off.
CareerBuilder Strategic Review
In connection with the planned spin-off of Cars.com, TEGNA will evaluate
strategic alternatives for CareerBuilder, including a possible sale.
CareerBuilder is a global leader in human capital solutions that
provides services ranging from labor market intelligence to talent
management software and other recruitment solutions. It is the largest
online job site in the U.S., measured both by traffic and revenue, with
a presence in more than 60 markets worldwide.
TEGNA owns a 53% controlling interest in CareerBuilder; minority owners
are Tribune Media and The McClatchy Company. At this time, there can be
no guarantee that any of the options under review will result in a
transaction.
Martore Retirement and Leadership of TEGNA and Cars.com
After more than 31 years of service to TEGNA and its predecessor Gannett
Co., Inc., Gracia Martore plans to retire as president, chief executive
officer and a member of the Board of Directors upon the closing of the
spin-off. Upon Martore’s retirement, Dave Lougee will assume the role of
chief executive officer and president of TEGNA and Alex Vetter will
serve as chief executive officer and president of Cars.com. Lougee and
Vetter will also serve on the Boards of TEGNA and Cars.com, respectively.
Dave Lougee currently serves as president of TEGNA Media, overseeing the
46 television stations the company owns or services. Lougee was named
president of Gannett Broadcasting in July 2007 and previously served as
executive vice president, media operations for Belo Corp. At Belo, he
also served as senior vice president; president and general manager of
TV and cable operations in Seattle/Tacoma; and news director at KING-TV
in Seattle/Tacoma. Before that, Lougee was vice president, news at
WRC-TV, the NBC station in Washington DC and vice president, news
director at KUSA-TV in Denver. In 2015, Lougee was inducted into the
Broadcasting & Cable Hall of Fame, and in 2014, was awarded the First
Amendment Leadership Award by RTDNF and the Broadcaster of the Year
Award by Broadcasting & Cable. He serves on several industry boards: he
is the joint board chairman of the National Association of Broadcasters
(NAB); serves as vice chair of the NBC Affiliates Board; is a member of
the BMI (Broadcast Music Inc.) Board of Directors, the Broadcasters
Foundation of America; and is a past chair of the Television Bureau of
Advertising (TVB) Board of Directors.
As one of the original members of Cars.com management, Alex Vetter has
helped shape the company from its initial concept into a leading online
automotive destination, steering the organization's growth strategy
while serving in a variety of executive roles. Vetter was named chief
executive officer and president of Cars.com in November 2014. Under
Vetter's leadership, Cars.com has grown to approximately 1,300
employees, and the company serves every local market in the U.S. In his
years with Cars.com, he has operated in nearly every capacity, spanning
product development, customer service, training, operations and sales.
Vetter has helped establish a vibrant local marketplace for cars,
enabling e-commerce activities with approximately 20,000 retailers and
every manufacturer, all of whom connect with site users on a daily
basis. Vetter serves on the boards of several digital technology
companies, including RepairPal.com, a leading marketplace for service
and repair.
Commenting on her planned retirement, Martore said, “I am incredibly
grateful to have spent more than 30 years serving this outstanding
organization and deeply honored to have had the opportunity to lead
TEGNA during its inaugural year. TEGNA has a real impact on the
day-to-day lives of millions of Americans, and I am so proud to have
been a part of this team. I have had the pleasure of working with many
incredibly talented people, and together we have generated significant
shareholder value and reinvented our business to ensure we will remain
highly relevant well into the future. It has been an amazing ride, and
both TEGNA and Gannett will always hold a special place in my heart.”
Marge Magner, chairman of TEGNA’s Board of Directors, said, “Gracia has
had an immeasurable impact on this company. She has led a profound
transformation of Gannett that included last year’s separation into two
focused public companies, both of which are well positioned for growth
and innovation. I have greatly enjoyed working closely with her over the
last decade and, on behalf of the entire Board and leadership team, wish
her much happiness in her well-deserved retirement.”
Martore joined Gannett in 1985 as assistant treasurer. She became a vice
president in the treasury group in 1993 and added investor relations
duties in 1995. She was named treasurer and vice president, investor
relations in 1998. She was promoted to senior vice president of finance
in addition to her treasurer’s responsibilities in 2001. In 2003,
Martore became senior vice president and chief financial officer and was
appointed to Gannett’s Management Committee. In 2005, she became
executive vice president and CFO. In October 2011, she was named
president and chief executive officer. Prior to joining Gannett, she
worked for 12 years in the banking industry.
Martore serves on the Boards of Directors of The Associated Press, FM
Global and WestRock Company. In October 2014, she was elected to the
board of trustees of The Paley Center for Media. Martore is a graduate
of Wellesley College where she was a Wellesley Scholar. She is also a
member of Wellesley College’s Board of Trustees.
Investor Call
TEGNA will hold an investor conference call to discuss this announcement
today at 9:00 a.m. (Eastern Time). To access the call, please use one of
the following dial-in numbers: 1 (855) 631-5368 or 1 (330) 863-3283 for
international callers and provide the passcode: 74772374.
A live webcast will be accessible through TEGNA's website, www.TEGNA.com.
Allow at least 10 minutes to access TEGNA's home page and complete the
links before the webcast begins. An investor presentation regarding the
announcement can be found on the Investor Relations section of TEGNA’s
website.
A telephone replay of the call will be available until September 21,
2016. The replay may be accessed by dialing 1 (855) 859-2056 or 1 (404)
537-3406 for international callers and providing the passcode: 74772374.
In addition, the webcast will be archived on TEGNA's website in the
Investor Relations section.
Advisors
Greenhill & Co. is acting as financial advisor on the spin-off and
Wachtell, Lipton, Rosen & Katz is acting as legal advisor.
About TEGNA
TEGNA Inc. (NYSE: TGNA) is comprised of a dynamic portfolio of media and
digital businesses that provide content that matters and brands that
deliver. TEGNA reaches more than 90 million Americans and delivers
highly relevant, useful and smart content, when and how people need it,
to make the best decisions possible. TEGNA Media includes 46 television
stations and is the largest independent station group of major network
affiliates in the top 25 markets, reaching approximately one-third of
all television households nationwide. TEGNA Digital is comprised of
Cars.com, the leading online destination for automotive consumers,
CareerBuilder, a global leader in human capital solutions, and other
powerful brands such as G/O Digital and Cofactor. For more information,
visit www.TEGNA.com.
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. Such
forward looking statements may include statements with respect to
TEGNA’s potential separation of Cars.com from TEGNA and the distribution
of Cars.com shares to TEGNA’s shareholders, the expected financial and
operational results of TEGNA and Cars.com after the separation and
distribution, the evaluation of strategic alternatives for
CareerBuilder, and changes to TEGNA’s management. 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. Such risks, uncertainties and changes in
circumstances include, but are not limited to: uncertainties as to the
timing of the spin-off or whether it will be completed, the failure to
satisfy any conditions to complete the spin-off, the expected tax
treatment of the spin-off, the impact of the spin-off on the businesses
of TEGNA and Cars.com, and uncertainties as to the results of the
evaluation of strategic alternatives for CareerBuilder, whether such
evaluation will result in a transaction, and the failure to achieve
anticipated benefits of any such potential transaction. Economic,
competitive, governmental, technological and other factors and risks
that may affect TEGNA’s operations or financial results are discussed in
our Annual Report on Form 10-K for the fiscal year ended December 31,
2015, 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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160907005831/en/
Source: TEGNA Inc.
Investors
TEGNA Inc.
Jeffrey Heinz,
703-854-6917
Vice President, Investor Relations
jheinz@tegna.com
or
Media
Sard
Verbinnen & Co.
Stephanie Pillersdorf/Pamela Greene/Hayley
Cook, 212-687-8080
or
TEGNA Inc.
Alison Holder,
703-402-6320
Director, Corporate Communications
aholder@tegna.com