The $215 million deal for the Texas stations breaks down to two ABC and Fox affils and one each from CBS and NBC, with an additional NBC affil on a subchannel. After closing, London COO Phil Hurley will continue to run the stations.
Gannett Buys 6 London Broadcasting Stations
Gannett Co. today is acquiring six of London Broadcasting Co.’s television stations in Texas for $215 million in an all-cash transaction.
The stations: KCEN (NBC) Waco-Temple-Bryan; KYTX (CBS) Tyler-Longview; KIII (ABC) Corpus Christi, KBMT (ABC) and its digital subchannel KJAC (NBC) Beaumont-Port Arthur; KXVA (Fox) Abilene-Sweetwater; and KIDY (Fox) San Angelo.
Gannett said the purchases do not overlap with any of its current broadcast and publishing properties.
Gracia Martore, president-CEO of Gannett, said: “The addition of these stations will expand Gannett’s reach into some of the fastest growing markets in the nation and furthers our successful transformation into a diversified multi-media company. With more than 70% of London Broadcasting’s advertising revenues driven by local advertisers, this acquisition will provide us access to attractive new markets in which we believe our local digital marketing services group, G/O Digital, will thrive.”
Gannett said it anticipates the acquisition to be accretive to EPS within the first 12 months. The new stations are expected to generate revenue of approximately $50 million in 2014. The transaction is also expected to provide Gannett with certain tax efficiencies following the recent sale of assets associated with KMOV St. Louis. Including expected synergies and the anticipated tax benefit, the purchase price implies a 6.7x average 2014/2015 EBITDA multiple.
The transaction is expected to close this summer, subject to regulatory approvals and customary closing conditions, the company said.
After closing, Phil Hurley, London Broadcasting COO, will continue to lead the six stations. Hurley will report to Dave Lougee, president of Gannett Broadcasting.
Stephens Inc. is providing financial advice to Gannett on the transaction.