May 3, 2017 — TEGNA’s board today approved of the spin-off of Cars.com slated to be completed on May 31. Trading is set to begin on June 1 on the New York Stock Exchange with the ticker symbol CARS.
TEGNA stockholders of record at the close of business on May 18 will receive one share of Cars.com for every three shares of TEGNA stock they own.
As part of the spin-off, Cars.com will pay TEGNA a one-time cash distribution of $650 million. It wiill also enter into new credit facilities with borrowing capacity of $900 million — some which will remain undrawn at closing.
Alex Vetter has been named as president and CEO of the new company. The new board includes:
- Scott Forbes (Chairman of the BOD): Chairman of Rightmove, the UK’s number one online real estate company, and Ascential, an international business to business media company
- T. Alex Vetter: President and Chief Executive Officer of Cars.com
- Jill Greenthal: Senior Advisor in the Private Equity Group of The Blackstone Group
- Thomas Hale: President of SurveyMonkey, the world’s largest online survey company
- Donald A. McGovern, Jr.: Retired from PricewaterhouseCoopers (PwC) in June 2013 as Vice Chairman, Global Assurance
- Greg Revelle: Chief Marketing Officer for Kohl’s
At the outset, Cars.com likely will not look to pay cash dividends to shareholders, but instead will invest in acquisitions and building organic growth.
We don’t know yet what the set price for the initial shares will be. TEGNA’s next earnings call is May 9, which will shed light on Cars.com’s first quarter performance. Cars.com generated $633 million in 2016 with an adjusted EBITDA at nearly $253 million.
It will be interesting to see whether Carvana’s weak IPO last week affects Cars.com’s initial trading. (The Impact of Carvana’s Less Than Stellar IPO).
For more analysis, read TBR’s 1st Quarter Auto Retail Vendor M&A Report.
Greenhill & Co. is acting as financial advisor on the separation transaction and Wachtell, Lipton, Rosen & Katz is acting as legal advisor.
Below is the link to the press release which includes full bios for Cars.com’s board members.