Nexstar Adding Stations In Calif. And Vt.

Nexstar Broadcasting Group announced Monday that it is buying KGPE, the CBS affiliate in Fresno, Calif. (DMA 55), and KGET and KKEY-LP, the NBC/CW affiliate and low-powered Telemundo affiliate in Bakersfield, Calif. (DMA 126), from Newport Television for $35.4 million.

Separately, Nexstar announced that it and Mission Broadcasting entered into a definitive agreement with Smith Media to acquire Fox affiliate WFFF and ABC affiliate WVNY Burlington, Vt. (DMA 97), for $17.1 million plus any working capital adjustments applicable at the time of closing in a transaction. Nexstar and Mission will enter into a local services agreement to provide sales and other services to WVNY upon consummation of the transaction.

The deal is part of the sell off of the Newport stations by its private equity owner Providence Equity Partners. It began the sell off in July, announcing deals with Nexstar, Sinclair and Cox totalling nearly $1 billion. At that time, Nexstar picked up 12 stations in eight markets for $285.5 million.

Nexstar said the proposed acquisitions of the Fresno and Bakersfield stations are expected to be accretive to its operating results immediately upon closing and will result in Nexstar operating one station and providing sales and other services to another in 25 of the 41 markets where it operates (which assumes the completion of the acquisition of 12 Newport stations, announced in July). In addition, it will expand to 71 the number of stations and related digital signals that Nexstar either owns or provides sales and other services to.

Nexstar and Mission said they intend to finance the station acquisitions through borrowings under their senior credit facilities. The transactions are subject to FCC approval and other customary approvals, and the Newport and Smith station acquisitions are expected to close in the first quarter of 2013.

Commenting on the agreements, Nexstar Broadcasting Group President-CEO Perry A. Sook said: “These transactions are consistent with our criteria for acquisitions that further strategically diversify our operations, create or present opportunities for virtual duopoly markets and which are financially accretive.

“In aggregate, the purchase price for the five new stations is less than 5.0 times the average 2011-12 pro-forma cash flow and we expect the combined acquisitions to increase our free cash flow by approximately 8% to 10% annually in each of the next two years. Under Nexstar and Mission’s ownership the stations will realize additional retransmission revenues as well as synergistic operating improvements, and on a pro-forma basis the acquisitions are both immediately accretive to results and leverage neutral on a debt-to-cash-flow basis.”

Waller Capital Partners served as the exclusive financial adviser to Smith Media.