McClatchy to sell a majority of its 15% ownership in CareerBuilder

McClatchy has entered into an agreement along with other owners – TEGNA Inc., the controlling shareholder owning 53 percent of CareerBuilder, LLC, and Tribune Media Company – to sell CareerBuilder to an investor group. The group is led by investment funds managed by affiliates of Apollo Global Management along with the Ontario Teachers' Pension Plan Board. The transaction is expected to close in the third quarter of 2017, subject to regulatory approval and customary closing conditions.

Prior to the sale, CareerBuilder has committed to making a normal distribution to the current shareholders, of which McClatchy expects to receive approximately $8 million.

As part of the agreement, current owners TEGNA Inc., Tribune Media Company and McClatchy will retain a minority ownership stake in CareerBuilder. McClatchy's ownership will be approximately 3.8 percent on a fully-diluted basis.

McClatchy's after-tax proceeds related to the sale of CareerBuilder are expected to be approximately $68 million bringing total cash received (including the normal distribution above) to approximately $76 million. In accordance with its 2012 bond indenture, the company is required to offer its after-tax proceeds from the sale to the holders of its secured bonds due in 2022 at par if not reinvested into the business within one year of receiving the proceeds. The company will record a non-cash impairment of $45 million to $55 million in the second quarter of 2017 in connection with the prospective sale.

The company's affiliate agreement with CareerBuilder will be terminated upon the earlier of July 31 or the closing of the transaction. Upon termination, the company's media businesses will continue to provide comparable digital employment solutions from CareerBuilder and/or other employment providers while continuing to list employment related ads on its websites and in its printed newspapers.

Craig Forman, McClatchy's president and chief executive officer, said: "Our CareerBuilder interest has been a valuable asset over the years, and we wish the company well in navigating the future. For McClatchy, the result of the TEGNA-led CareerBuilder transaction will provide after-tax proceeds to further reduce debt and/or potentially use for reinvestment in the company.''