ReachLocal Inc. (NASDAQ: RLOC) shares spiked 187% on news of its shares being acquired by Gannett Co. (NYSE: GCI) for $4.60 per share in cash. The transaction is subject to customary closing conditions, including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and there being validly tendered and not withdrawn in the tender offer a majority of the outstanding ReachLocal shares. ReachLocal will expand Gannett’s digital revenue by roughly 50% with its more than 16,000 customers in markets throughout North America, Latin America, Europe and Asia/Pacific.
CEO of ReachLocal Sharon Rowlands, stated: “We are excited to bring new market opportunities and scale to Gannett’s growing and important digital business. We believe that this powerful combination will drive growth and allow us to accelerate innovation, enabling the best and most complete digital marketing solutions in the market today.”
Gannett president and CEO Robert Dickey, stated: “The acquisition of ReachLocal accelerates Gannett’s digital growth strategy, adding more than $320 million of annual digital revenue, the best digital marketing solutions technology in the market, and an outstanding and well-respected management team to Gannett’s digital business.”
Shares of ReachLocal closed at $4.56 on just over 5 Millions in volume while Gannett closed at $13.35 down 2%.