Details Strategy and Capital Allocation Plans for Publishing
Company and Broadcasting & Digital Company
Separation Remains on Track for Mid-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.
Gannett Co., Inc.For media inquiries, contact:Jeremy
GainesVice President, Corporate
Communications703-854-6049jmgaines@gannett.comorSard Verbinnen
& Co.George Sard/Stephanie Pillersdorf/Pamela
Blum212-687-8080orFor investor inquiries, contact:Jeffrey
HeinzVice President, Investor
Relations703-854-6917jheinz@gannett.com