—Gray Television announced that it has agreed to acquire WJRT-TV and WTVG-TV from affiliates of SJL Holdings LLC for approximately $128.0 million in cash.
WJRT-TV and WTVG-TV are ABC-affiliated television stations serving the Flint-Saginaw-Bay City, Mich., and Toledo, Ohio, television markets, respectively. In addition, WTVG-TV will soon add a local CW station as a multicast channel. Nielsen ranks the Flint-Saginaw-Bay City at No. 68 and Toledo at 76.
Gray said WJRT-TV and WTVG-TV lead their local markets in all-day ratings and in most, if not all, local newscasts. According to BIA revenue data cited by Gray, WJRT-TV is the highest ranked television station in its market, and WTVG-TV is a close second ranked station in its market.
The transaction purchase price represents a multiple of approximately
7x a blended average of 2012-13 pro forma broadcast cash flow
of the stations, including expected synergies. As such, Gray’:s
acquisition of WJRT-TV and WTVG-TV will be
immediately free cash flow accretive to Gray. Gray expects to finance
the transaction with new term loans, cash on hand and/or by accessing
the capital markets.
The transaction is subject to receipt of regulatory and other
approvals and is expected to close in the third or fourth quarter of
2014. Cooley LLP served as legal counsel for Gray. Proskauer served as
legal counsel for SJL.
Upon completion of all
pending transactions, Gray will own and/or operate television stations in
44 television markets broadcasting 142 program streams including 77
affiliates of the Big Four networks, reaching just over 8 percent of U.S. TV households.