WordStream’s Acquisition Marks An Exciting Chapter in Local Search Marketing and PPC Ecosystem
Gannett, the owner of USA Today, has officially announced WordStream’s acquisition. The deal will cost Gannett $150 million, and it would enable the American media company to fortify their digital transformation journey. WordStream, founded by marketing influencer Larry Kim in 2007, is widely recognized as a leading provider of cloud-based SaaS solutions for local and regional businesses and agencies. The Online advertising enabler offers exceptionally optimized digital marketing services based on PPC.
According to the latest announcement, the purchase price for WordStream is $130 million in cash, net of cash acquired, plus up to an aggregate $20 million earnout payable in 2019 and 2020 based on achieving certain revenue targets. The transaction builds upon Gannett’s existing data-driven digital marketing services, ReachLocal and SweetIQ.
Robert Dickey, president and chief executive officer of Gannett, said, “This acquisition marks another critical milestone in Gannett’s digital transformation, enhancing our ability to support businesses and agencies in our local markets with the intelligent, data-driven marketing solutions they need to drive growth.”
Bob added, “WordStream’s technology, extensive data and analytics capabilities together with an experienced executive team will bring tremendous value to Gannett’s expanding digital marketing services business.”
WordStream Prepares to Build Their Businesses and Achieve Their Most Ambitious Goals
In a personal blog on their website, CEO of WordStream, Howard Kogan, said, “When I joined WordStream last year, the company was already growing at an incredible rate. And yet, we have big ambitions in order to fulfill our purpose – to help small and medium-sized businesses and the agencies that serve them succeed and grow.”
Howard added, “We’ve been working hard since then refining our vision, developing new products and services, and empowering our teams so we can better serve our customers. Today, I’m thrilled to announce that a new chapter for WordStream has begun. We’ve entered into an agreement to be acquired by Gannett, a move that positions us to provide even more value to our customers so they can build their businesses and achieve their most ambitious goals.”
Branching Operations to Deliver a Greater Range of Solutions to Help Customers Succeed and Grow
The acquisition would not change much for WordStream, except for a stronger brand positioning in the US and emerging markets of Australia and New Zealand. As part of Gannett, the PPC giant would focus on leveraging Gannett’s expansive media network as well as their strong presence in the UK, Australia, and New Zealand to better serve the growing international client base. The primary focus would be to continue to offering WordStream customers with a “greater range of solutions to help them succeed and grow.”
Currently, WordStream helps thousands of businesses to harness the power of Google, Facebook, and Bing by leveraging its discovery and recommendation technologies, intelligent campaign optimization, and online training programs in its cloud-based SaaS solutions.
These Do-It-Yourself (DIY) solutions provide businesses and agencies the ability to manage and optimize performance and results on paid search and social advertising campaigns. WordStream is a proven innovator and delivers a world-class customer experience.
Through WordStream, ReachLocal, and SweetIQ, Gannett will now be able to provide the full spectrum of digital marketing services from DIY to managed service to any local or regional business or agency. WordStream will continue to be headquartered in Boston, MA.
Sharon Rowlands, said, “The market for digital marketing services in the U.S. is over $90 billion and consists of both large and small clients. The addition of WordStream’s best-in-class DIY SaaS solutions significantly enhances our capabilities and expands our addressable market.” Sharon is the President of USA TODAY NETWORK Marketing Solutions and chief executive officer of ReachLocal.
Sharon added, “WordStream enables us to provide a full range of digital marketing solutions to Gannett’s large local client base and grow our digital share of wallet.”
More Details on the WordStream Acquisition
Jefferies LLC acted as exclusive financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisor to Gannett in connection with this transaction. Houlihan Lokey acted as exclusive financial advisor and Gesmer Updegrove acted as legal advisor to WordStream in connection with this transaction.
In the first year, WordStream is forecasted to contribute approximately $55 million in digital marketing services revenue and approximately $16 million of Adjusted EBITDA. Gannett anticipates the transaction 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.