) - a leading media and marketing solutions company - stated that
it has bought Rovion, an advertising company, which was a part of
). Per the deal, Gannett acquired Rovion along with its other
related assets. The financial terms of the acquisition were not
Boston-based Rovion will form a part of the Gannett Digital
organization under PointRoll and will help all Gannett segments
to gain the advantage of its capabilities. Rovion is famous for
its principal product 'Ad Composer,' which facilitates a
self-service platform for creating rich media and mobile HTML
ads. Another major benefit of Ad Composer is that it does not
require any encrypting expertise.
Off late, advertising and print media companies are mainly
looking for mobile rich media advertisement solutions and
self-service advertisement creation tools with a view to
diversify their portfolio. As a result, we believe Gannett's
acquisition is the ideal deal for the company, which will enhance
its mobile and self-service capabilities.
The deal demonstrates Gannett's strong cash position, evident
by $237.4 million of cash at the end of the third quarter.
Further, the company generated free cash flow of $161.8 million
at the end of the quarter.
Recently, Gannett announced better-than-expected third quarter
results with quarterly earnings of 56 cents a share, which
surpassed the Zacks Consensus Estimate by a couple of cents, and
expanded 27.3% from last year's 44 cents, reflecting a surge in
television advertising attributed to Olympics and political
spending, and subscription based model.
Gannett remains committed to streamlining its cost structure,
strengthening its balance sheet and rebalancing its portfolio.
However, we remain apprehensive about risks that the company
faces due to its high dependence on advertising revenues.
Currently, we prefer to remain on the sidelines and maintain
our long-term Neutral recommendation on the stock. However, the
company holds a Zacks #1 Rank that translates into a short-term
Strong Buy rating, and well defines the company's effort to
navigate through challenging times.
GANNETT INC (GCI): Free Stock Analysis Report
LOCAL CORP (LOCM): Free Stock Analysis Report
To read this article on Zacks.com click here.