Dallas, Texas 03/11/2014 (FINANCIALSTRENDS) – The McClatchy Company (NYSE:MNI), a local media company which owns media properties such as The Charlotte Observer and The Sacramento Bee, and its partners has sold one of their classified-advertising website Apartments.com to CoStar Group, Inc., a provider of commercial real estate research and information services. The amount of the deal was $585 million.
Despite not owning the apartment rental site, The McClatchy Company expects to receive about $147 million from the sale of Apartments.com. The McClatchy Co. owns a 25.6 percent stake in Classified Ventures LLC, the company that sold Apartments.com to CoStar Group. The company paid Classified Ventures $1.1 million in wholesale fees for those products.
“McClatchy plans to use its net proceeds from the sale for general corporate purposes, including debt reduction,” according to the company. “In fiscal 2013, McClatchy had digital advertising revenue of $3.8 million from selling Apartments.com advertising products.”
The portion of the gain from the sale of Apartments.com will be recorded in The McClatchy Company (NYSE:MNI) equity income in unconsolidated companies in the quarter in which the transaction is completed.
The transaction is expected to close in the second quarter of 2014.
The McClatchy Company, last month, reported its fourth quarter 2013 earnings with GAAP net income of $12.5 million, or $0.14 earnings per share, compared to a net loss of $30.0 million, or $0.35 a share. Total revenues for the quarter were $344.7 million, down 8.4 percent. Advertising revenues were also down by 6 percent to reach at $238.8 million and circulation revenues were up 9.1 percent at $92.7 million. Total digital-only revenues were up by 15.8 percent compared to the same estimated 13-week quarter in 2012. McClatchy said its digital audience continues to grow. Mobile users represented 40 percent of total monthly unique visitors in the quarter. By the end of fourth quarter, The McClatchy Company (NYSE:MNI) had $80.8 million in cash. Total debt at the end of the fourth quarter was $1.556 billion.