DMA 11

Nexstar Buying KASW Phoenix For $68M

The deal for the CW affiliate is a result of Meredith agreeing to spin off the station after buying it along with KTVK from Gannett in June.

Nexstar Broadcasting Group is paying $68 million plus working capital to Meredith Corp. for CW affiliate KASW Phoenix (DMA 11). Meredith and its sidecar SagamoreHill purchased KASW from Gannett Co. and Sander Media as part of Gannett’s acquisition of Belo Corp. As part of FCC approval, Meredith and SagamoreHill voluntarily agreed to divest KASW to an independent buyer within 90 days of its June 19 closing.

Nexstar said the proposed acquisition “is expected to be accretive to Nexstar’s operating results immediately upon closing and inclusive of all other previously announced transactions, will expand the company’s coverage to 57 markets in 22 states, reaching approximately 19.7 million television households.

Nexstar said it intends to finance the station acquisition through borrowings under its senior credit facilities. The transaction is subject to FCC approval and other customary approvals, and is expected to close in the first quarter of 2015.

In the first 12 months following the closing of the transaction, KASW, Nexstar said, is expected to generate approximately $14 million in adjusted broadcast cash flow and is expected to provide free cash flow accretion in the first year of ownership of approximately $0.30 per share.

Said Nexstar Broadcasting Group President-CEO Perry A. Sook: “The planned acquisition of KASW-TV in Phoenix is highly accretive to Nexstar’s operating results, further strategically diversifies Nexstar’s station portfolio, and presents a great opportunity for the company to leverage its intellectual capital and operating management disciplines to drive significant synergies.

“In addition, the transaction offers Nexstar entrée to the Arizona and Phoenix markets which represent a natural complement to our existing operations in the Southwestern region of the United States.

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“Pro-forma for expected synergies,” Sook continued, “including additional retransmission revenues, the purchase price for KASW is less than 5.5 times the average 2014-15 pro-forma projected cash flow. Under Nexstar’s ownership we intend to initiate local programming and a local community orientation.”

Marci Ryvicker, Wells Fargo senior analyst commented on the deal: “First and foremost, we think this is a good/ smart entrance into the Phoenix market, which is the 12th largest DMA…. It also complements Nexstar’s existing operations in the Southwestern region of the U.S. Given that this is a new market and state (Arizona) for Nexstar, we are thinking there is more to come.”


Comments (6)

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Linda Leavell says:

October 23, 2014 at 9:14 am

Correction: Phoenix is 11th largest DMA not 12 largest DMA, Nextstar will become first television station in Arizona!, and will become largest market. Good news, Under Nexstar’s ownership we intend to initiate local programming and a local community orientation. Nexstar, we are thinking there is more to come.
good ideal Perry Sook! agreed?

    Darrell Bengson says:

    October 23, 2014 at 10:42 am

    lol, good luck with Nexstar

    Joanne McDonald says:

    October 23, 2014 at 2:44 pm

    I’d be happy if Perry Sock could be able to make a move up om buying KYMA which was bought from the now deceased James (Jimmy) Rogers through Intermountain West Comunications Company and KSWT which was bought by Harry Pappas through Pappas Telecasting under Pappas Liquidating Trustee with Lee W Shubert at the time of sale and David Stapleton at the time of the sale being completed being bought by Brian W Brady to run under Blackhawk Broadcasting buy outsourced the operations of KYMA and KSWT to News Press-Gazette station KECY in neighboring Yuma and also buys KVTV in Laredo from Eagle Creek Broadcasting as well or Perry Sock and Nexstar could also do a direct trade and swap with Brian W Brady which Nexstar gives KASW in Phoenix and WLYH in Harrisburg to Brian W Brady while Brian W Brady gives KYMA and KSWT in Yuma and KVTV in Laredo to Perry Sock and Nexstar as a way for Brian W Brady to better focus on his very core assets which are the FOX affiliates he owns and operates instead of Perry Sock and Nexstar trying to buy WICZ and WBPN-LD from Brian W Brady under Stainless Broadcasting for Mission Broadcasting to be run for Nexstar to run in Binghamton.

    Wagner Pereira says:

    October 23, 2014 at 3:38 pm

    Since none of what you propose EVER comes about as you do not understand valuation, using the first words from your posts “I’d be happy if”, you must be pretty miserable.


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