NEWS

Torstar Acquires 56 Percent Interest in VerticalScope

Acquisition important step in positioning company for more digitally oriented future

TORONTO, ONTARIO – July 29, 2015 – Torstar Corporation today announced it has acquired a 56 percent interest in VerticalScope Holdings Inc. (“VerticalScope”), a digital media company that owns and operates more than 600 consumer enthusiast online forums and premium content sites across North America.

Founded in 1999, VerticalScope(www.VerticalScope.com)is a Toronto-based vertically focused digital media company whose sites attract more than 80 million unique visitors and generate more than 500 million page views a month. The company, which has more than 130 employees, serves the North American market through its network of user forums and premium content sites offering advertisers access to large audiences in popular verticals, including automotive, powersports, outdoors and health.

VerticalScope’s highly focused user forums and content sites provide advertisers with attractive platforms to reach engaged audiences through social media marketing across hundreds of vibrant special-interest communities. It has the largest multi-platform automotive audience in the United States as measured by comScore Media Metrix in June 2015, with more than 17 million unique visitors a month, with users visiting hundreds of specific auto make and model user forums, as well as the premium content site AutoGuide.com. Premium sites in other verticals include Motorcycle.com, ATV.com and PetGuide.com. 

“VerticalScope is a Canadian success story, with a proven track record of growth and profitability over the past five years and is well-positioned to build on that record,” said David Holland, President and Chief Executive Officer of Torstar Corporation. “We are enthusiastic about this investment, which achieves our objective of allocating capital to a high-growth business opportunity. It is an important step forward in the transformation of Torstar, positioning the company for future growth. We are very pleased to partner with Rob Laidlaw, its talented founder and CEO, and Jesse Rasch, a founding investor, as the company pursues its next stage of growth”.

“We are excited to have Torstar onboard as a long-term partner,” said Rob Laidlaw, Founder and CEO of VerticalScope. “We believe that VerticalScope is still in the early innings of its growth trajectory, and look forward to continuing to execute on our acquisition and organic-growth strategies in the years to come.”

Holland added, “We are pleased to be investing alongside the continuing shareholders and a proven management team in a business that is benefitting from the shifts occurring in advertising spending, including the growth in advertising in areas such as social media, programmatic and mobile. The company’s commitment and expertise in the development of audience has been a critical element in the success it has enjoyed and its platform supports the daily interaction of millions of registered users.” 

Torstar has acquired ABRY Partners’ minority interest in VerticalScope along with more than one third of the shares held by the continuing shareholders, with whom Torstar will share control. The aggregate consideration paid by Torstar was $200 million based upon an enterprise value of $404 million.  In the balance of 2015, VerticalScope plans to pursue making a distribution to its shareholders, which if completed would reduce Torstar’s net investment to approximately $178 million. The acquisition multiple paid by Torstar is approximately 12 times VerticalScope’s trailing adjusted EBITDA and 10 times VerticalScope’s expected forward adjusted EBITDA. Torstar’s investment has been financed from its cash resources.

BMO Capital Markets was Torstar’s financial advisor and Osler, Hoskin & Harcourt LLP its legal advisor. RBC Capital Markets was VerticalScope’s financial advisor and Blake, Cassels & Graydon LLP its legal advisor.

About Torstar Corporation
Torstar Corporation is a broadly based media company listed on the Toronto Stock Exchange (TS.B). Its businesses include the Star Media Group led by the Toronto Star, Canada’s largest daily newspaper, and Free Daily News Group Inc., which publishes the English-language Metro newspapers in several Canadian cities; Metroland Media Group, publisher of community and daily newspapers in Ontario; and also include digital properties including thestar.com, Workopolis, wagjag.com, toronto.com, save.ca, Olive Media and eyeReturn Marketing.  

Torstar’s news releases are available on the Internet at www.torstar.com

About VerticalScope

VerticalScope enables the world to share expertise and discover knowledge on subjects they love. Established in 1999, VerticalScope owns and operates more than 600+ consumer shopping portals and enthusiast forum Web sites serving the automotive, powersports, outdoor, home, technology, sports, and health vertical markets. VerticalScope’s online properties reach an average of 80 million highly qualified buyers and purchase decision makers each month. To learn more visit: www.VerticalScope.com.

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