Gannett Co. (NYSE: GCI) is acquiring ReachLocal Inc. (NASDAQ: RLOC), a digital marketing company, for $156 million.
Robert Dickey, Gannett CEO, says the deal will add more than $320 million of annual revenues to Gannett—owner of USA Today and more than 100 local news properties. Also, ReachLocal’s focus on local small and medium-sized businesses will help extend Gannett’s reach into new local markets. The deal is expected to close by Sept. 30.
ReachLocal, based in Woodland Hills, California, is expected to expand Gannett’s digital revenue by about 50 percent by adding more than 16,000 customers in North America, Latin America, Europe and the Asia/Pacific region. Gannett’s current digital services arrangement in existing 107 local markets expires in 2017. ReachLocal’s clients include home services, healthcare, automotive and professional services businesses.
Earlier in June, Gannett’s flagship newspaper—USA Today—reported that the company was reviewing a bid to acquire rival Tribune Publishing Co. after the Tribune took steps to rebuff Gannett’s $864 million offer. Tribune Publishing, which owns Los Angeles Times, Chicago Tribune and nine other daily newspapers, changed its name to Tronc Inc., short for Tribune online content, to reflect a new focus on digital content.
With the proliferation of mobile devices and social media, the value of digital marketing companies—which produce campaigns for websites, social media and mobile devices—has risen. Recent strategic acquirers buying digital marketers have included Web.com Group Inc.’s (Nasdaq: WEB) deal for Yodle and Perficient Inc. (Nasdaq: PRFT) purchased Enlighten.