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.
BRAND CONNECTIONS
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.
Comments (6)
Brian Bussey says:
May 14, 2014 at 11:04 am
gannett will now have 100% reach of Texas voters ( Belo gave them 80%). The political reveune alone from the upcoming political season alone could finanace this purchase.
Wagner Pereira says:
May 14, 2014 at 1:28 pm
Put JC on a Milk Carton. 4 hours and he has not re-purposed his 500+ word rants playing scrabble with all the TV calls and owners.
Wolfgang Paul says:
May 14, 2014 at 5:27 pm
That’s actually quite funny, Insider. 😉
Joanne McDonald says:
May 14, 2014 at 6:45 pm
This could open the door for Gannett to purchase KUQI from High Maintenance Broadcasting to consolidate it with KIII by acquiring it under the failed station waiver, KRGV and WBRZ from the Marsh family if Marsh not interested in continuing to operate the station themselves, and the Bonten/Bluestone stations with Gannett being able to apply for a waiver to operate both KTXS and KXVA in Abilene-Sweetwater and KIDY to operate with KTXE-LP in San Angelo due to KXVA and KIDY being less financially stabled and financially challenged and and KTXE-LP is just only a low power station in San Angelo and KIDY wouldn’t have problems airing KTXE programming on a digital subchanel of KIDY all as a way to complement Gannett acquisition of TV stations from the Belo and London deals combined.
John Pappert says:
May 15, 2014 at 10:13 am
$50M Are the kidding. A Lot more than than, given truth rules Advertising Costs and proper gander is the strategists boss.
John Pappert says:
May 15, 2014 at 10:14 am
y [is inserted after the…by proxy]