CINCINNATI, March 20, 2019 /PRNewswire/ -- The E.W.
Scripps Company (NASDAQ: SSP) is acquiring eight television
stations in seven markets from the Nexstar Media Group, Inc.
(NASDAQ: NXST) transaction with Tribune Media (NYSE: TRCO) as it
continues executing its plan to enhance the strength and operating
performance of its Local Media portfolio.
The acquisition grows the Scripps local television station
footprint to 59 stations in 42 markets with a reach of nearly 30
percent of U.S. TV households. It also diversifies Scripps' network
affiliations, adding two CBS stations, two Fox stations and four
CWs.
"This acquisition represents another step in our plan to improve
the depth, reach and durability of our broadcast television station
portfolio while adding nicely to the company's free cash flow
generation," said Adam Symson,
president and CEO of Scripps. "These stations allow us to rebalance
our portfolio with meaningful assets – at an efficient price ahead
of a robust political advertising season."
The acquired stations' blended 2017-18 revenue was $263 million, and EBITDA was $56 million.
Transaction highlights:
- The purchase price is $505
million for six markets and $75
million for WPIX, the CW affiliate in New York City.
- The buyer's multiple for the six markets excluding New York is 8.1x, net of tax benefits.
- This is an asset purchase, and Scripps will receive a full step
up in the tax basis of the assets acquired.
- Scripps expects to finance the transaction with a mix of term
loans and unsecured debt.
- The company anticipates its total leverage ratio, net of cash,
would be approximately 5x at closing.
- Scripps has granted Nexstar the option to buy back WPIX in
New York City. The option is
exercisable from March 31, 2020,
through the end of 2021.
A more durable Scripps television portfolio
The eight
stations deepen Scripps' presence in Arizona, Florida, Michigan and New
York. Scripps will add its first stations in the No.
1-ranked DMA of New York City and
the states of Virginia and
Utah. It will now operate nine
markets with more than one station, compared to four a year
ago.
Scripps is acquiring:
- WPIX, the No.5-ranked CW affiliate in New York City
- KASW, the CW affiliate in Phoenix (which joins the Scripps ABC affiliate
there)
- WSFL, the CW affiliate in Miami–Fort Lauderdale (adjacent to
the Scripps NBC affiliate in West Palm
Beach, Florida)
- KSTU, the No. 2-ranked Fox affiliate in Salt Lake City
- WTKR, the No. 2-ranked CBS affiliate, and WGNT, the CW
affiliate, in Norfolk,
Virginia
- WTVR, the No. 2-ranked CBS affiliate in Richmond, Virginia
- WXMI, the Fox affiliate in Grand
Rapids, Michigan
Ahead of the 2020 election cycle, Scripps will be even better
positioned as an important platform for political advertisers, with
an expanded presence in key political battleground states,
including:
- Five stations in Florida
reaching approximately 67 percent of its households;
- Four stations in Michigan
reaching approximately 78 percent of its households;
- Three stations in the two largest TV markets in Virginia – including the two stations in
Norfolk and one in the state
capital of Richmond.
"With these acquisitions, Scripps will reach 30 percent of U.S.
television households, entering Virginia and Utah for the first time," said Brian Lawlor, president of Local Media. "We look
forward to sharing with all of these new communities Scripps'
unwavering commitment to impartial and impactful journalism."
The stations have a combined 769 employees.
Scripps recently closed on the acquisition of the ABC television
stations in Tallahassee, Florida,
and Waco, Texas, owned by Raycom
Media and is awaiting consent from the Federal Communications
Commission on its acquisition of 15 television stations in 10
markets from Cordillera Communications.
The Scripps acquisition of the Nexstar-Tribune stations is
expected to close at the same time as the Nexstar-Tribune
merger.
The transaction is expected to be financed through a mix of term
loans and unsecured debt and will bring the company's total debt to
$1.85 billion. Financing is being led
by Morgan Stanley Senior Funding Inc. and Wells Fargo.
Methuselah Advisors and Morgan Stanley & Co. LLC acted as
financial advisors and BakerHostetler acted as legal counsel for
Scripps.
Scripps will host a conference call today at 10:30 a.m. Eastern time. A presentation called
"Nexstar/Tribune acquisition" is available
at http://ir.scripps.com.
Callers from the U.S. can dial 800-230-1096 and international
callers can dial (612) 332-0228 to join the call five minutes
before it begins and ask to join the "Scripps call." A replay will
be available from 12:30 p.m.
March 20 until 11:59 p.m. March 27
at (800) 475-6701; international callers can dial (320) 365-3844.
Access code: 465539.
Forward-looking statements
This document contains
certain forward-looking statements related to the company's
businesses that are based on management's current expectations.
Forward-looking statements are subject to certain risks, trends and
uncertainties, including changes in advertising demand and other
economic conditions that could cause actual results to differ
materially from the expectations expressed in forward-looking
statements. Such forward-looking statements are made as of the date
of this document and should be evaluated with the understanding of
their inherent uncertainty. A detailed discussion of principal
risks and uncertainties that may cause actual results and events to
differ materially from such forward-looking statements is included
in the company's Form 10-K on file with the SEC in the section
titled "Risk Factors." The company undertakes no obligation to
publicly update any forward-looking statements to reflect events or
circumstances after the date the statement is made.
About Scripps
The E.W. Scripps Company (NASDAQ:
SSP) serves audiences and businesses through a growing portfolio of
local and national media brands. With 36 television stations,
Scripps is one of the nation's largest independent TV station
owners. Scripps runs a collection of national journalism and
content businesses, including Newsy, the next-generation
national news network; podcast industry
leader Stitcher; the fast-growing national broadcast
networks Bounce, Grit, Escape and Laff; and Triton, the
global leader in digital audio technology and measurement services.
Scripps produces original programming including "Pickler &
Ben," runs an award-winning investigative reporting newsroom in
Washington, D.C., and is the
longtime steward of the Scripps National Spelling Bee. Founded
in 1878, Scripps has held for decades to the motto, "Give light and
the people will find their own way."
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SOURCE The E.W. Scripps Company
