Online marketing company ReachLocal Inc. will be merged into media company and newspaper publisher Gannett Co. Inc. in a deal valued at $156 million, it was announced Monday.
Merging the Woodland Hills internet firm will accelerate Gannett’s digital strategy and add digital marketing technology to the McLean, Va.-based media company.
ReachLocal Chief Executive Sharon Rowlands said the transaction brings new market opportunities to Gannett’s 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,” she said in a prepared statement.
ReachLocal promotes small- and medium-sized businesses on the internet by selling a package of marketing services. They include website construction, search engine optimization and advertising, live chat with customers, display ads, a Facebook page, reputation management and mobile apps.
Gannett will buy all outstanding shares of ReachLocal for $4.60, or $3 more than its closing price on Friday. The deal is expected to be completed in the third quarter.
The announcement came after market close Monday when ReachLocal shares finished up 9 cents, or more than 5 percent, to $1.69 on the Nasdaq. In after-hours trading, the price jumped by more than $4, or 167 percent.