WKYC's parent company, Gannett Co., Inc. (NYSE: GCI) today announced that it has entered into an agreement to acquire six of London Broadcasting Company’s television stations in Texas for $215 million in an all-cash transaction. The acquisition includes KCEN (NBC) in Waco-Temple-Bryan, KYTX (CBS) in Tyler-Longview, KIII (ABC) in Corpus Christi, KBMT (ABC) and its digital sub-channel KJAC (NBC) in Beaumont-Port Arthur, KXVA (FOX) in Abilene-Sweetwater and KIDY (FOX) in San Angelo. The purchase of these stations further deepens Gannett’s broadcasting presence in the high-growth state of Texas without any overlap of Gannett’s current local broadcast and publishing portfolio.
Gracia Martore, president and chief executive officer 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 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 in 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 purchase price is subject to adjustment based on the net working capital of the stations at closing, and a portion of the purchase price will be held in escrow following the closing. After closing, Phil Hurley, London Broadcasting Company chief operating officer, 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.
