Nexstar to Buy ABC Affiliate for $18.5 Million, Sells Ex-Fox for $6.7 Million
IRVING, TEXAS and EVANSVILLE, IND.:
Nexstar is selling off its former Fox affiliate in Evansville and buying the ABC affiliate there. Nexstar said it cut a deal with Gilmore Broadcasting to acquire WEHT-TV, the ABC affiliate, for $18.5 million plus working capital adjustments applicable at closing. It’s selling WTVW-TV, formerly a Fox affiliate, to Mission Broadcasting for $6.7 million. Mission is Nexstar’s shared-services partner in 15 stations, as it will be for WTVW when the deal is sealed.
Nexstar intends to borrow $11.8 million under its senior credit facility to finance the WEHT purchase, net of the proceeds from the WTVW sale. The transactions are subject to Federal Communications Commission approval and are expected to close by year-end 2011.
The deal comes just shy of three weeks after Nexstar announced it had retained advisors to explore a sale. The company owns and/or operates 65 TV stations, notwithstanding the WEHT deal. Nexstar also is battling Fox over the network’s demand for a piece of retransmission fees. The two are parting ways in Evansville, Fort Wayne and Terre Haute, Ind., and in Springfield, Mo. Nexstar has filed an antitrust lawsuit against Granite Broadcasting, which picked up the Fox affiliation in Fort Wayne, giving it control of the ABC, Fox, NBC, MyNetwork and CW affiliates there.
Perry Sook, president and CEO of Nexstar, said the purchase price for WEHT was around four times average 2010-11 cash flow.
“Under Nexstar’s ownership, the station will realize additional retransmission revenues as well as synergistic operating improvements, and on a pro-forma basis the acquisition is both immediately accretive to results and de-leveraging on a debt-to-cash-flow basis,” he said.
Nexstar today reported a 1.3 percent uptick in second-quarter revenues, to $75.5 million, a record for the company. Retransmission revenues were up 18.4 percent to $8.6 million. Local comprised the largest portion, at $45.7 million. National was $16.4 million. Nexstar reported total debt of $616.1 million, versus cash of $12.5 million. Net loss for the quarter was $2.6 million or 9 cents a share, down from a net loss of $9.4 million or 33 cents a share a year ago.
~ Deborah D. McAdams, Television Broadcast