Sinclair to Purchase Four Points Media TV Stations for $200 Million
HUNT VALLEY, MD.: Sinclair Broadcast Group is buying the seven TV stations belonging to Four Points Media for $200 million, the company said today. Sinclair entered into a definitive agreement to but the assets of Four Points Media from affiliates of Cerberus Capital Management. Four Points owns and operates seven stations in four markets, reaching 2.65 percent of the U.S. TV households. They include: KUTV-TV (CBS 2) and KMYU-TV (MNT 9) in Salt Lake City (DMA 32): KEYE-TV (CBS 42) in Austin, Texas (DMA 44); WTVX-TV (CW 34), WTCN-CA (MNT 50), and WWHB-CA (AZTECA 48) in West Palm Beach/Fort Pierce, Fla. (DMA 38); and WLWC-TV (CW 28) in Providence, R.I./New Bedford, Mass. (DMA 53).
The transaction is subject to the Federal Communications Commission’s approval as well as customary antitrust clearance. The companies anticipate the closing and funding of the acquisition to occur in the first quarter of 2012 given that no waivers are required under FCC rules. Following receipt of antitrust approval of the transaction, which is expected to occur within 30 days, and prior to closing of the acquisition, Sinclair will provide management services and working capital needs of the stations in consideration of both service fees and performance incentives through a Local Marketing Agreement. Upon FCC approval, Sinclair expects to finance the transaction with a new term loan, a draw on its revolving line of credit, and/or cash on hand.
“The stations, which are in prime middle-markets, are a perfect complement to our portfolio of assets and TV footprint,” said David Smith, President and CEO of Sinclair. “As we have discussed publicly, one of our bigger challenges has been how best to use our balance sheet to maximize shareholder returns, and grow and strengthen our portfolio of stations in an accretive manner. The Four Points acquisition will allow us to capitalize on operating synergies, including adding these stations under certain existing contracts, leading to both additional earnings and free cash flow next year. We estimate that on a pro forma basis with these synergies this transaction will grow cash flow by an incremental low teen percentage rate in 2012.”
Sinclair now owns and/or operates 58 television stations in 35 markets, reaching about 22 percent of U.S. TV households.