Gannett Provides Significant Progress On Its Strategic Growth Plan

(RTTNews) - Media holding company Gannett Co., Inc. (GCI) President and Chief Executive Officer Gracia Martore provided an update on the company's progress in executing its strategic growth plan at the Goldman Sachs Communacopia Conference.

Martore said that the company has made tremendous progress on its transformation plan since it was launched in February of last year, and it remains relentlessly focused on its successful execution over the long term.

Martore also provided updates on specific business initiatives, including Belo Corp.'s shareholder approval of the proposed transaction; the planned launch of a four-market pilot extension of the all-access content subscription model; The expansion of the company's digital marketing services.

Martore announced the planned launch of a four-market pilot extension of the all-access content subscription model, beginning in early October in Indianapolis, IN, Rochester, NY, Appleton, WI, and Fort Myers, FL, in partnership with USA TODAY. The pilot will incorporate a new daily national and world news section from USA TODAY, among other enhancements, in the print editions and related e-Newspapers in these locations.

Martore revealed the expansion of the company's digital marketing services, which now operates under the brand name G/O Digital. These investments ensure that G/O Digital will continue to have the strong sales support it requires in existing Gannett markets, and is ready to hit the ground running in Belo markets immediately upon the close of the transaction.

Investments associated with the pilot program and the expansion of digital marketing services are expected to be in the range of $2 million to $3 million in the third quarter and $4 million to $5 million in the fourth quarter this year.

Martore said, "As we continue to advance our strategic plan, we remain committed to maintaining our strong balance sheet and a disciplined approach to our allocation of capital. To support these important new initiatives, we have taken steps to raise capital over the past several weeks, including a $1.0 billion senior note offering announced this morning, as well as a $600 million senior note offering completed in July. These transactions are expected to result in an increase to interest expense, which will impact the third quarter of 2013 by approximately $6 million."

Gannett agreed in mid-June to acquire Dallas, Texas-based television company Belo Corp. (BLC) for $13.75 per share or about $1.5 billion, plus the assumption of $715 million in existing debt, in an all-cash deal valued at about $2.2 billion. The deal, which has the unanimous approval of the boards of directors of both companies, is expected to close by the end of 2013.

Earlier today, Gannett announced that it intends to offer $500 million of senior notes due 2019 and $500 million of senior notes due 2023 in a private offering. The notes will be guaranteed on a senior basis by the subsidiaries of the Company that guarantee its revolving credit facility.

The company said it intends to use the net proceeds from the offering plus available cash to finance the acquisition of Belo Corp. Any remaining proceeds may be used for general corporate purposes.