It closes on the $105 million purchase from Gray Television of the CBS affiliate in Toledo and the NBC affiliate in Midland-Odessa, Texas.
Tegna on Wednesday said it has completed its previously announced acquisition of WTOL, the CBS affiliate in Toledo, Ohio (DMA 71), and KWES, the NBC affiliate in Midland-Odessa, Texas (DMA 142), from Gray Television for $105 million in cash. The stations were divested as part of Gray Television’s $3.6 billion acquisition of Raycom that also closed Wednesday.
As previously announced, the transaction represents a compelling purchase price multiple of 5.0 times expected average 2017-18 EBITDA, including run rate synergies and net present value tax savings (or 5.9 times, prior to tax savings). The transaction is accretive to EPS within the first 12 months and immediately accretive to free cash flow. tegna is financing the transaction through the use of available cash.
“WTOL and KWES are strong local media brands well-positioned in key markets that further enhance our portfolio of Big 4 affiliates,” said Dave Lougee, Tegna president-CEO. “We have a strong track record of successful acquisitions and continue to pursue opportunities that create value for our shareholders.”
As a result of the completed sale, Tegna now owns or operates 49 television stations in 41 markets, covering one-third of U.S. television householders. Tegna remains the largest NBC affiliate group, the second largest CBS affiliate group and the largest owner of Big 4 affiliates in the top 25 markets.
KWES further deepens Tegna’s presence in the high-growth state of Texas where Tegna now owns 12 stations, covering 87% of television households in the state.
WTOL will join Tegna’s WKYC, the NBC affiliate in Cleveland, and WZZM, Tegna’s ABC affiliate in Grand Rapids, Mich., in serving Ohio and Michigan, two key political battleground states.