After its persistent efforts to buy tronc, formerly Tribune Publishing, Gannett Co., Inc. announced its plans to acquire digital marketing company ReachLocal, Inc. with the goal to enhance Gannett's digital revenue by 50%.
Gannett, which owns USA Today and more than 100 other media properties in the U.S., plans to acquire ReachLocal for roughly $156 million at $4.60 per share in cash.
That's a 188% premium to the unaffected closing price on Friday, June 24, 2016.
The transaction has been approved by the Boards of Directors of both companies and is expected to close in the third quarter of 2016.
Robert Dickey, Gannett president and CEO, stated: “The acquisition of ReachLocal accelerates Gannett’s digital growth strategy, adding more than $320 million of annual digital revenue.”
ReachLocal, founded in 2004, provides digital marketing and advertising services for local business in markets like home services, healthcare, automotive and professional services, with over 16,000 clients across North America, Latin America, Europe and Asia/Pacific.
Dickey added, “ReachLocal’s focus on local small- and medium-sized businesses aligns well with Gannett’s local-to-national strategy and extends our reach into new local markets.”
Like many print publishers, Gannett is eager to find new sources of revenue in an age of declining readership.
According to a statement, Gannett will “benefit from leveraging ReachLocal’s best-in-class digital marketing services products in Gannett’s existing 107 local markets in the U.S.”Recently, Gannett acquired Milwaukee-based Journal Media Group, which includes 15 daily newspapers and their online assets.