McClatchy Co. to net $90 million on sale of Apartments.com

Published: Tuesday, Mar. 4, 2014 - 12:00 am
Last Modified: Tuesday, Mar. 4, 2014 - 12:06 am

For years, Wall Street investment analysts have peppered executives at The McClatchy Co. with questions about when the company would cash in on its lucrative Internet classified-advertising investments.

A partial answer came Monday. McClatchy and its partners sold one of their classified-ad websites, Apartments.com, for $585 million in cash.

The deal will generate $147 million for Sacramento-based McClatchy, which owns The Bee and 29 other newspapers, or about $90 million after taxes.

That’s a significant cash infusion for a company that earned $47 million for all of 2013, before certain one-time adjustments. It also represents a substantial price for an asset that wasn’t a huge part of McClatchy’s business. Apartments.com generated $2.7 million in cash flow for the company last year.

“We felt like Apartments was important and growing, but this transaction allowed us to monetize it,” said Elaine Lintecum, McClatchy’s chief financial officer. “We were very happy with the deal.”

Investors reacted favorably. McClatchy shares shot up 43 cents to close at $5.74 on the New York Stock Exchange.

McClatchy said it will use the proceeds for debt repayment and other “general corporate purposes.”

McClatchy owns 25.6 percent of Classified Ventures LLC, a Chicago company that owns Apartments.com. Early Monday, Classified Ventures announced the sale of the Apartments site to CoStar Group Inc., a real estate information service. The sale is scheduled to be completed in the second quarter.

Once the sale is completed, Lintecum said, McClatchy’s newspaper websites will sever their affiliation with Apartments.com. The newspaper sites will continue to carry apartment classifieds, however.

Classified Ventures is keeping its other website, Cars.com.

With the newspaper industry struggling to make the transition to a digital world, McClatchy and other major publishers have made big bets on classified-advertising sites. McClatchy has been a partner in Classified Ventures since 1998. Its partners are media companies Tribune Co., Gannett Co., A.H. Belo Corp. and Graham Holdings Co., the former Washington Post Co.

Through a separate partnership, McClatchy owns a share in help-wanted website CareerBuilder.


Call The Bee’s Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.

Read more articles by Dale Kasler





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