TV Station Giant Tegna to Spin Off Cars.com, Review Options for CareerBuilder Stake
The company, created via the separation of Gannett, also says Dave Lougee will replace Gracia Martore as CEO once the separation is completed.
TV station giant Tegna, which was created by the separation of Gannett into two companies, said Wednesday that it plans to spin off Cars.com and is evaluating strategic alternatives for its 53 percent stake in CareerBuilder, including a possible sale.
The news marks the latest example of media companies separating businesses. Gannett spun off its print business, including USA Today, and retained its TV and digital assets under the new company name Tegna. The company says it is the largest independent broadcast station group among major network affiliates in the top 25 U.S. markets, in a move that took effect last summer. Tribune similarly separated its print from its TV assets.
Tegna also said Wednesday that Gracia Martore would retire as president and CEO upon the closing of the spinoff, which is expected to take place in the first half of 2017. Dave Lougee, who currently oversees the TV business as president of Tegna Media, will then take over her roles, it said.
After the separation, the broadcast company hopes to "benefit from dedicated focus on opportunities specific to broadcasting, including further innovation around programming and content, investments in adjacent businesses and acquisitions," Tegna said. "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 broadcast business is made up of 46 TV stations owned or serviced by Tegna. Its stations reach approximately one-third of all U.S. TV households. The company is the number 1 NBC affiliate group, number 1 CBS affiliate group and number 4 ABC affiliate group.
Tegna, based in McLean, Va., said that Cars.com would be headquartered in Chicago. "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," it said. "Tegna anticipates that the planned spinoff 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."
In connection with the planned spinoff of Cars.com, Tegna said it would also "evaluate strategic alternatives for CareerBuilder, which provides recruitment solutions and intelligence and is the largest online job site in the U.S. measured by traffic and revenue. Tribune Media and The McClatchy Co. own the rest of CareerBuilder. "At this time, there can be no guarantee that any of the options under review will result in a transaction," Tegna said.