TV station power Tegna has two big announcements this morning: It plans to spin off Cars.com, the nation’s No. 2 auto classified web site. And CEO Gracia Martore — who led Tegna’s separation from Gannett last year — will retire when the deal closes, expected by mid-2017.
The Cars.com spinoff “will establish two strong, industry-leading companies that are well positioned to compete and to continue to profitably grow in their targeted markets,” Martore says. “Each business will have increased strategic, operating, and financial flexibility at a time when the broadcast and digital sectors are both rapidly evolving – presenting both companies with a wealth of opportunities.”
She adds that the auto sales site will have more flexibility to “participate in the active digital automotive M&A market.”
Meanwhile, Tegna will still have the cash flow it needs to grow including with acquisitions.
When Martore retires, Tegna Media President Dave Lougee will become CEO. Alex Vetter, who runs Cars.com, will become its CEO.
The TV station company will hang on to its 53% stake in CareerBuilder — although it and its partners Tribune Media and McClatchy believe “it also makes sense to evaluate strategic alternatives for this business given its recent evolution.” That could include a sale.
Tegna says that the Cars.com spinoff is contingent on several conditions, including a determination that the deal will be tax-free. Tegna will stop repurchasing its shares until the deal is done.
If all goes as planned, Cars.com will be based in Chicago and trade with the ticker symbol CARS.