The broadcast group is paying The Gazette Co. $100 million in cash for the ABC affiliate, its first station in Iowa.
Gray Television Inc. on Tuesday reached an agreement with The Gazette Co. to buy KCRG, the ABC affiliate in Cedar Rapids, Iowa (DMA 90), for approximately $100 million in cash. This acquisition marks Gray’s first purchase of a TV station in Iowa.
Gray said that “consistent with Gray’s other recently acquired television stations, KCRG is the No. 1-ranked television station in its DMA and dominates its local market in terms of community service, viewership, innovation and revenue. Strategically, the transaction reinforces Gray’s transformative growth strategy as we continue to acquire high-quality assets in attractive markets with the same culture, values and record of success as our existing television stations.”
Chuck Peters, the president-CEO of The Gazette Co., said: “The Gazette Co., owned by a trust for the benefit of its employees, is focused on growing businesses and growing people. We realized that we have done all we can do as a single television station with the business and for the people of KCRG TV9. We look forward to seeing what the very talented KCRG TV9 team can do with the scale and connections of Gray Television.”
Since The Gazette Co., which also owns The Cedar Rapids Gazette, first put KCRG on the air in 1953, the newspaper and television station have worked together. The Gazette Co. and Gray said they will continue “the long-standing and successful partnership between The Gazette and KCRG-TV.”
Gray today closed on its purchase of most of KCRG’s non-license assets and began operating the television station subject to the licensee’s ultimate control. The company said it anticipates closing on the station’s remaining assets in the fourth quarter of 2015 following receipt of FCC and other approvals.
Gray said that including expected synergies, the transaction purchase price represents a multiple of approximately 6.9 times a blended average of the station’s 2015-16 pro forma broadcast cash flow. “As such,” the company added: “the acquisition of KCRG-TV will be immediately free cash flow accretive to Gray. We financed the transaction with cash on hand.”
Kalil & Co. was the broker in the sale.