Tegna and Tribune Media are both revealing anticipated proceeds related to the sale of CareerBuilder.
Tegna, which today announced an agreement to sell the business to investments funds managed by affiliates of Apollo Global Management and the Ontario Teachers’ Pension Plan Board, is anticipating its cash proceeds will be about $250 million. The company will use the funds to retire existing debt and for other general corporate purposes.
Tegna will remain an ongoing partner in CareerBuilder, but the company will reduce its 53% controlling interest to 12.5% on a fully-diluted basis post-transaction, and Tegna will no longer report CareerBuilder’s financials as part of its consolidated operating results. CareerBuilder will now be shown as an equity investment in Tegna’s results.
Meanwhile Tribune Media, which holds a 32% ownership interest, expects to receive $157 million in cash and retain an approximate 8% ownership stake in CareerBuilder on a fully-diluted basis. Due to the transaction, Tribune is anticipating a non-cash impairment charge of approximately $64 million to be recorded during the second quarter.
Despite the sale of CareerBuilder, Tegna is still high on its digital business segment. Tegna is expecting the percentage increase in media segment revenues next quarter to be in the low to mid-single digits compared to the second quarter of 2016.
“TEGNA generated revenue in the first quarter of 2017 comparable to the first quarter last year, despite a significantly lower level of political and Super Bowl spending, a softer advertising environment and one less day in the quarter. At TEGNA Media, we benefited from strong growth in retransmission revenue and at TEGNA Digital, Cars.com benefited from an increase in advertising sold directly by the company and the acquisition of DealerRater, partially offset by a decline in fees from advertising sold by newspaper affiliates,” said Gracia Martore, president and CEO, in a statement.