The quarter’s top deal announcement by far was the possible next giant leap in TV consolidation, Media General Inc.’s $3.10 billion acquisition of Meredith Corp.
Broadcast station M&A volume reached $3.04 billion in the third quarter of 2015, according to SNL Kagan figures released today. TV registered deals worth $2.61 billion.
Year-to-date, at the end of September, TV deal announcements amounted to $2.75 billion.
Due to a number of high-ranking TV deals, the TV broadcast cash flow multiple on two-year average forward cash flow rose from 8.0x at the end of 2Q to 8.3x at the end of 3Q.
The quarter’s top deal announcement by far was the possible next giant leap in TV consolidation, Media General Inc.’s $3.10 billion acquisition of Meredith Corp. At a 9.1x multiple of seller’s 2016/2017 broadcast cash flow, SNL Kagan values the 17 TV stations in 13 markets at $1.81 billion, which would make the deal the TV sector’s largest since Media General’s purchase of LIN Media LLC in March 2014.
However, this transaction might not take place, if Media General’s shareholders agree to a bid by Nexstar Broadcasting, announced on Sept. 28, to buy all of Media General for $4.1 billion. Nexstar’s offer is not included in SNL Kagan’s total deal volume numbers.
While the Media General/Meredith deal would affect mainly top- and mid-size markets, another large TV station buyer, Gray Television, extended its small-market foothold in 3Q, paying $100 million for Gazette Co.’s only TV station in Cedar Rapids, Iowa, and $442.5 million for Schurz Communications Inc. At 8.5x forward broadcast cash flow, SNL Kagan allocated a deal value of $420.5 million to Schurz’s 15 TV stations and two local marketing agreements in seven markets.
Also expanding by means of a deal valued at more than $100 million was Raycom Media Inc., which paid $160 million for Drewry Communications Group’s seven TV stations (including one local marketing agreement).
Gray’s purchase of Schurz and Raycom’s acquisition of Drewry were both primarily TV deals, but the transactions also came with a number of radio stations, transforming Gray and Raycom into combined TV and radio station owners.