Tegna to spin off Cars.com on May 31
04 May 2017
Tegna will spin off Cars.com on May 31, and it will start trading as an independent company on the New York Stock Exchange (NYSE) as CARS.
Tegna, the digital and broadcast business that used to be part of Gannett Co. Inc., confirmed the spinoff at its board meeting Wednesday. It announced that Cars.com would hold an investor meeting in New York City on May 16 to review the spinoff, and Tegna would hold a similar meeting on May 17.
The planned spinoff was announced in September, at the same time Tegna announced it was exploring “strategic alternatives” for CareerBuilder.com, the other major business owned by Tegna Digital. (Reuters reported last month that CareerBuilder might be sold within a week for $1 billion, but nothing further has been announced.)
As part of the spinoff, Cars.com will pay Tegna a $650 million cash dividend, and set up a $900 million credit facility “to invest in organic growth initiatives and selective acquisitions,” Tegna said in the news release about the spinoff approval. Tegna trades as TGNA on the NYSE.
“As an independent company, we have greater flexibility to capture the opportunities ahead of us,” said Alex Vetter, Cars.com CEO, who will remain in that position and will serve on the company’s board of directors after the spinoff. “We are a pure-play digital company in an excellent position to drive long-term growth and profitability, and we are a unique investment opportunity in the digital automotive space.”
TrueCar (Nasdaq: TRUE) is publicly traded. Carvana, an online auto retailer (NYSE: CVNA) went public last week. And CarGurus, an auto site similar to Cars.com and Autotrader.com, is reportedly planning an IPO as well. (AutoTrader, the largest by far in revenue, is part of Cox Automotive Group and is privately held by Cox Enterprises.)
In addition to Vetter, Tegna announced five board members for Cars.com once it’s independent:
— Scott Forbes, who will serve as chairman. He is also chairman of Rightmove Plc, the U.K. property site traded on the LSE as RMV, and Ascential, an international b-to-b media company. He was previously chairman of Orbitz Worldwide, and joined Rightmove in 2005.
— Jill Greenthal, a senior advisor in the private equity group of The Blackstone Group and a current board member at Tegna. She is also on the boards of several other companies including Akamai Technologies.
— Thomas Hale, president of SurveyMonkey and former COO of HomeAway.
— Donald A. McGovern Jr., a CPA with more than 40 years of financial and accounting experience.
— Greg Revelle, CMO for the U.S. retailer Kohl’s and a one-time CMO at AutoNation.
Two long-time key executives at Tegna will retire when the spinoff is completed: Gracia Martore, president and CEO, and Jack Williams, president of Tegna Digital.