• by Wendy Davis  @wendyndavis, June 14, 2005

Gannett's acquisition of PointRoll last week was likely a good business move, Merrill Lynch analyst Lauren Rich Fine indicated, in a report about the deal. "We think it is essential that traditional media companies invest in faster growth businesses and we think [Gannett] has found one in PointRoll, and at a reasonable price," stated the report.

Fine estimated that the purchase price--which she believed to be "under $100 million"--was about 10 to 11 times the current year's estimated EBITDA (earnings before interest, taxes, depreciation and amortization). Terms of the deal were not disclosed, but it's been widely reported that Gannett paid $100 million for the Fort Washington, Pa.-based company.

Gannett's move to purchase an Internet-oriented company followed on the heels of several other online deals by traditional publishers. Last week, E.W. Scripps Co. announced a deal to buy comparison shopping site Shopzilla for $525 million; several months ago, Gannett, along with Knight Ridder Inc. and the Tribune Co., purchased a majority share of online news aggregator Topix.net; and last year The New York Times Co. announced it had agreed to buy About.com from Primedia for $410 million, while Dow Jones purchased MarketWatch for more than $500 million.

As a wholly owned Gannett subsidiary, PointRoll will continue to operate as a stand-alone business, said a PointRoll spokesman.

Tolman Geffs--the Jordan, Edmiston Group, Inc., managing director who helped put together the deal--said a "range of companies," including media organizations and private equity companies, had indicated interest in buying PointRoll in the six months the company was on the block.

Separately, PointRoll Monday announced that three new publishers--CBSDigital Media, About.com, and IGN Entertainment--had signed up for a volume-discount type of program allowing them to offer marketers certain ad units at a lower cost than in the past.