Nexstar Buying KLAS Las Vegas For $145M

Nexstar Broadcasting Group has agreed to buy CBS affiliate KLAS Las Vegas (DMA 41) from Landmark Media Enterprises for $145 million plus working capital.

Nexstar says the proposed acquisition is expected to be immediately accretive to Nexstar’s operating results upon closing.

Including all other previously announced transactions, the purchase will expand the company’s portfolio to 110 television stations serving 58 markets in 23 states, reaching approximately 20.3 million television households or 18% of U.S. television households.

Nexstar said it intends to finance the station acquisition with cash generated from operations and borrowings under its senior credit facilities and/or additional capital markets activities. The transaction is subject to FCC approval and other customary approvals, and is expected to close in the first half of 2015.

Commenting on the acquisition, Nexstar Broadcasting Group President-CEO Perry A. Sook said: “Nexstar remains opportunistic in expanding our station platform for growth and the acquisition of KLAS-TV in Las Vegas is consistent with our strategic focus on identifying, executing and integrating accretive transactions. Pro-forma for expected synergies, including additional retransmission revenues, the purchase price for KLAS is less than 6.0 times the average 2015/2016 pro-forma projected cash flow.

“Under Nexstar’s ownership we intend to build on KLAS’s rich tradition of local programming and local community involvement. With an enhanced sales effort, additional retransmission revenues and synergistic operating improvements, the acquisition, on a pro-forma basis, is expected to add an average of approximately $0.40 per share of free cash flow per year to Nexstar’s operating results over the 2015/2016 period.

“Las Vegas represents a natural complement to our existing operations in the Southwestern region of the United States. KLAS-TV is presently operated by a single station owner, therefore financial results under Nexstar’s ownership will benefit from our scale, expense synergies and proven operating management disciplines.

“Finally,” Sook added, “with the post-closing implementation of Nexstar’s strong local news programming, KLAS will be well-positioned to capitalize on political spending in 2016 including the presidential election and the Nevada U.S. Senate race.”

Wells Fargo Senior Analyst Marci Ryvicker liked the news: “The station represents Nexstar’s entry into the Las Vegas market, and should help the company benefit not only from the Nevada U.S. Senate Race, but also from big presidential spend as Nevada is expected to be a swing state again in 2016.

“We continue to like Nexstar’s continued accretive acquisition track given the company’s considerable headroom for M&A versus the ownership cap. With the elections now over, we would expect additional announcements this year.”