The group is purchasing KMVT (CBS) And KSVT (Fox) from Neuhoff Corp. for cash.
Gray Buying Twin Falls Duopoly For $17.5M
Gray Television Inc. has reached an agreement with Neuhoff Corp. to acquire CBS affiliate KMVT and Fox affil KSVT Twin Falls, Idaho (DMA 192), for $17.5 million in cash.
Gray said in a statement: “KMVT is the highest rated and highest grossing television station in the Twin Falls DMA according to Nielsen and BIA data.” It is a CBS affiliate that carries CW programming on a subchannel.
Despite the relatively small size of the market, both stations produce and broadcast local newscasts in high definition.
“A long list of awards and accolades recognize how KMVT and KSVT excel at serving Southern Idaho’s Magic Valley and Sun Valley,” said Hilton Howell, Gray’s president-CEO. “This success makes them a perfect fit for Gray Television. And with the resources of Gray behind them, the stations will enjoy even greater success in the future.”
Beth Neuhoff, president of Neuhoff Communications, said: “While it is difficult for us to part with KMVT-KSVT, we know that the stations require a larger company to move to the next level, and Gray is the only logical owner for such great properties. We are therefore excited for the stations, the employees, and the local communities that Gray will soon be the steward of our proud investment.”
Gray said the transaction purchase price represents a multiple of approximately 6.0 times a blended average of 2014-15 pro forma broadcast cash flow of the stations including expected synergies. As such, the purchase will be immediately free cash flow accretive to Gray.
Gray said it expects to finance the transaction with cash on hand. The transaction is subject to receipt of regulatory and other approvals and is expected to close in the third quarter of 2015.
Gray said the transaction “is consistent with our strategy of enhancing shareholder value through select acquisitions of market-leading stations that share the culture and values of our existing television stations.”