Gannett Co. Inc. agreed to buy WordStream Inc., a provider of cloud-based software-as-a-service solutions, to help with digital marketing campaigns.
The transaction builds upon Gannett's existing data-driven digital marketing services, ReachLocal and SweetIQ.
The purchase price is $130 million in cash, net of cash acquired, plus up to a payable earn out of $20 million in 2019 and 2020 based on achieving certain revenue targets, the company said May 10.
WordStream is expected to contribute about $55 million in digital marketing services revenue and about $16 million of adjusted EBITDA in the first year. The deal will be accretive in the first full year of operations and funded from borrowings under the company's revolver. The acquisition is expected to close in the second quarter after the expiration or earlier termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the satisfaction of other customary closing conditions.
Jefferies LLC acted as exclusive financial adviser and Skadden Arps Slate Meagher & Flom LLP acted as legal adviser to Gannett in connection with the transaction. Houlihan Lokey acted as exclusive financial adviser and Gesmer Updegrove acted as legal adviser to WordStream in connection with the transaction.