Gannett Co., Inc. (GCI) recently announced that it has offloaded Gannett Healthcare Group (“GHG”) for an undisclosed amount. The diversified media conglomerate sold the unit to OnCourse Learning.
Gannett Healthcare not only provides education but also aids in the preparation of certification exams, online recruitment, digital media, publications and other associated services. These services are provided for nurses and other health care professionals in the U.S.
We believe that the GHG acquisition is quite suitable for the portfolio of OnCourse Learning, which in itself is an online education and training provider. Gannett also benefits from this divestment as it is all set to focus on its core operations by streamlining its business.
Earlier, the company had announced its decision to split its business into two separate entities, one completely focusing on the Broadcasting and Digital businesses, and the other concentrating on Publishing. This step is in line with Tribune Company’s spinning off its newspaper business into publicly traded Tribune Publishing Company (TPUB). News Corporation (NWSA) and Time Warner Inc. (TWX) have also separated their broadcasting and digital properties from the sluggish print businesses.
For quite some time now, Gannett has been attempting to expand its presence in broadcasting and digital products market with a view to lower its dependency on the soft print media business as well as traditional advertising, and therefore reduce susceptibility to economic conditions.
The news of Gannett taking over Cars.com underscores the same strategy. Prior to this, the company had bought six television stations of London Broadcasting Company and acquired television-station operator, Belo Corp. We believe this will transform Gannett’s business model, which was largely focused on low-margin newspapers, to a high-margin multi-media business.
Apart from business model diversification initiatives to add revenue streams and counter any economic onslaught, Gannett is adapting to the evolving multi-platform media universe, which currently includes the Internet, mobile, social media networks and outdoor video advertising. The company is also realigning its cost structure and streamlining operations to increase efficiency.
Gannett currently holds a Zacks Rank #3 (Hold).
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