McClatchy Completes Sale Of 25.6% Stake In Cars.com To Gannett - Quick Facts

(RTTNews) - McClatchy Co. (MNI) said that it and the remaining partners in Classified Ventures, LLC or CV completed the sale of their entire stakes in CV to Gannett Co., Inc. (GCI) for a price that values CV at $2.5 billion.

The definitive agreement to sell the ownership stakes was originally announced on Augugu 5, 2014.

CV was a joint venture among McClatchy, Gannett, Tribune Media Company, Graham Holdings Company and A. H. Belo Corporation. McClatchy owned 25.6% of CV, the primary asset of which is the online car shopping website Cars.com.

McClatchy noted that Gross proceeds to the selling partners were $1.8 billion. Proceeds to McClatchy, net of transaction costs, were $631.8 million. According to the sale agreement, $25.6 million of the net proceeds received by McClatchy are to be held in escrow until October 1, 2015. Prior to the transaction closing CV distributed about $6.0 million to McClatchy related to cash accumulated from earnings of CV.

After-tax proceeds are anticipated to be approximately $406 million.

McClatchy expects to record a gain on the sale of its interest in CV in the fourth quarter of 2014 and anticipates paying transaction-related taxes in the first quarter of 2015.

Effective today, McClatchy, Tribune Publishing Company, The Washington Post and A. H. Belo entered into new, five-year affiliate agreements with Cars.com that allow each company to continue to sell Cars.com products and services exclusively in their local markets. The affiliate agreements increase the wholesale rate at which the affiliates purchase Cars.com products.

McClatchy noted that under its bond indenture for its 2022 senior secured notes it is required to offer the after-tax proceeds from this transaction - to the extent that they are not reinvested within 365 days of the closing of the transaction - in an offering to repurchase those bonds at par.