Diamond Castle Holdings teams with former Emmis exec Randy Bongarten to form Bonten Media and purchase small-market station group. Bonten is in the market for other stations, parties say.
Diamond Castle Holdings, a New York City-based private equity firm, is buying Bluestone Television for $230 million, the parties announced this morning.
Diamond has teamed with former Emmis Television President Randy Bongarten to run the stations under the banner of Bonten Media Group.
Bluestone Television, a portfolio company of Providence Equity Partners based in Wichita, Kan., owns eight full-power and two low-power TV stations with multiple network affiliations in eight markets, ranging from the Tri-Cities of Tennessee and Virginia (DMA 92) to Eureka, Calif. (DMA 193). It has a virtual duopoly in Tri-Cities, where it owns the NBC affiliate (WCYB) and operates the Fox affiliate (WEMT) under a joint sales agreement.
The station lineup on Bluestone’s Web site is up to date, except that it no longer operates the WB cable outlet in Chico-Redding (DMA 130) or the digital UPN afiliate in Greenville-New Bern-Washington, N.C. (DMA 107).
John Grossi, vice president and CFO of Bluestone, said the group has annual cash flow of $22.4 million. He called the $230 million “a fair price for buyer and seller.”
“We are thrilled to partner with Randy Bongarten, an excellent manager with a long track record of building value in the television sector,” said David Wittels, a co-founder and senior managing director of Diamond Castle.
“In Bluestone we have identified a leading television station group that should continue to thrive under Randy’s leadership,” he said. “This investment highlights our commitment to build great companies in partnership with superior managers.”
BlueStone Television was formed in July 2002 by President and CEO Sandy DiPasquale in partnership with Providence Equity Partners. Prior to Bluestone, DiPasquale was president and COO of STC Broadcasting from its formation in March 1997 until it was sold to LIN Television in January 2002.
Randy Bongarten said that Bluestone is just a first step, that it is in the market for additional stations. “Together with our network partners, we will focus on bringing the highest quality news and entertainment to our viewers, and being a valuable resource to our advertisers,” he said.
The transaction is expected to close in the first half of 2007, subject to FCC approval.
Diamond Castle was founded in 2004 by Larry Schloss, the former global head of CSFB Private Equity and chairman of DLJ Merchant Banking Partners, and four former managing directors of DLJ. It focuses on investments in the power, financial services, media and communications, healthcare and industrial sectors.
UBS Investment Bank acted as the exclusive financial advisor, and Weil, Gotshal and Manges and Hogan & Hartson acted as legal advisors to Bluetone and Providence Equity Partners in the transaction.
Lehman Brothers Inc. acted as financial advisor and Shearman & Sterling LLP and Covington & Burling LLP acted as legal advisors to Diamond Castle.