Gannett Acquires SweetIQ, Building Out ReachLocal’s Suite of Digital Products

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And the great local rollup is underway…

Newspaper publisher Gannett announced Thursday afternoon, after the closing bell, that it has acquired Montreal-based listings management company SweetIQ, which will be rolled into its ReachLocal suite of software for small businesses and brands. SweetIQ’s products provide local businesses with tools to manage their listings and reputation, and measure consumer engagement.

While terms of the deal were not disclosed, Mark MacLeod, a founder at SurePath Capital Partners who advised SweetIQ, said the deal was “very compelling” for SweetIQ, and noted that the company walked away from a completed round of funding to accept the offer. He called the pairing “hugely complementary” and said that synergies in terms of teams and vision between the two companies were very clear.

ReachLocal CEO Sharon Rowlands told Street Fight that the deal came together “almost organically” as Gannett came to understand that ReachLocal had a gap in its services, and had come to know the SweetIQ team: “Whether you’re an SMB or whether your a national brand with multiple locations, reputation management and location management are foundational products,” said Rowlands. “It’s basically the first thing you should be doing with your marketing. And so to have those as core to us and integrated with everything else we do … we just felt that was very important.”

Rowlands cast the acquisition within the broader context of Gannett, as well, noting that the company is in the process of migrating all of Gannett’s digital marketing customers onto the ReachLocal platform. In the near future, all sales of digital marketing services for Gannett local newspaper customers will be delivered through ReachLocal, which will offer a fuller suite of solutions with SweetIQ’s technology.

“Gannett has incredible local relationships with advertisers,” noted Rowlands, “but they didn’t necessarily have the digital DNA or credibility. And so when you combine those local relationships with the digital DNA of ReachLocal and now SweetIQ, it’s very powerful.”

According to MacLeod, the SweetIQ team will all stay on in the pairing, including CEO Mohannad El-Barachi, who will be “in the air a lot” as the companies merge their services.

In a statement, El-Barachi said that since inception, SweetIQ has had “an unwavering commitment to solve online-to-offline attribution and help businesses better connect with hyper-local consumers.” He suggested that the company would be able to leverage Gannett’s and ReachLocal’s salesforces and relationships to grow faster in the combination.

The deal comes at a pivotal time for local, immediately following up on Yext’s IPO last week. A number of analysts have suggested in recent months that the fragmented local marketing technology industry has been long overdue for a major consolidation.

“Gannett is doing what they promised last year and stepping up as a real acquirer in what I see as a critically necessary consolidation in local,” said Constant Contact founder and Brevi CEO Randy Parker of the deal. “Some of us fault them for taking so many years to want to ‘own’ digital marketing, but let’s hope they continue.”

“I feel like this is a continuation of a very positive trend for local,” said MacLeod.

David Hirschman is a co-founder of Street Fight. Street Fight is operated by Brandify.

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