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Nielsen to buy Tribune's Gracenote for $560M

As expected, Tribune Media Co. inked an agreement to sell substantially all of its digital and data business operations, comprised of Gracenote video, music and sports, to Nielsen Holdings plc for $560 million in cash.

Tribune Media expects to receive about $500 million in after-tax proceeds from the transaction, the majority of which will be used to repay existing debt with the rest to be reinvested in the business. The company expects the deal to close during the first quarter of 2017.

Tribune Media said Dec. 20 that it will retain ownership of the business-to-consumer websites, Covers.com and ProSportsDaily.com. The deal provides Nielsen data and technology that underpins the programming guides and personalized user experience for major video, music, audio and sports content.

Tribune Media also plans to declare and pay a special dividend of about $500 million during the first quarter of 2017 to stockholders and warrant holders. The company will use existing cash to pay the special dividend. Tribune plans to continue its existing $400 million share repurchase program, which has about $168 million of remaining capacity.

Nielsen will operate Gracenote as a business unit, which will continue to function from its headquarters in Emeryville, Calif. Gracenote will join global performance management company's Watch segment.

Nielsen plans to fund the transaction through a combination of cash and debt. Nielsen expects the acquisition of Gracenote to be neutral to 2017 GAAP EPS and slightly accretive in 2018, according to a separate news release.

Moelis & Co. and Guggenheim Securities acted as financial advisers and Debevoise & Plimpton acted as legal adviser to Tribune Media. Nielsen was advised on the transaction by PJT Partners and worked with Baker & McKenzie as legal advisers.