The advancement of digital marketing has entered a new chapter with the acquisition of WordStream by advertising giant Gannett. The deal closed at $130 million as it cleared all regulator demands.
“The acquisition of WordStream immediately expands our addressable market with Do-it-Yourself (DIY) SaaS solutions,” said Gannett CEO and president Robert Dickey. “Gannett is now able to offer a full spectrum of digital marketing services to any local or regional business or agency, which, combined with our large, local sales presence, will allow us to grow our share of local digital advertising.”
With an audience of over 125 million people, Pulitzer-Prize winning content through USA Today’s network, more than 100 local media brands, and the digital marketing services of SweetIQ and ReachLocal, Gannett expects that the WordStream acquisition will contribute approximately $55 million in digital marketing services revenue and approximately $16 million of adjusted EBITDA in the first year under their corporate umbrella.
If revenue targets are achieved, the deal could give WordStream shareholders another $20 million in earnings in both 2019 and 2020.
The operation was founded with a combined base of cash in hand and borrowed capital. Now, the over 200 employees of WordStream in the Boston area will be working for Gannett.
“The market for digital marketing services in the U.S. is over $90 billion and consists of both large and small clients. The addition of WordStream’s best-in-class DIY SaaS solutions significantly enhances our capabilities and expands our addressable market,” said Sharon Rowlands, president of USA Today Network Marketing Solutions and chief executive officer of ReachLocal, when the news of the deal first broke.