Cerberus Capital Management, L.P. is selling its Four Points television stations to group owner Sinclair Media. For an investment of $200M, Sinclair gets one station in Austin TX, one in Providence RI, two in Salt Lake City and three in West Palm Beach.
The deal represents a territorial expansion for the group, taking it into DMA territory where it does not already have stations.
Coming in the acquisition are:
* KUTV (CBS 2) Salt Lake City, Utah (DMA 32)
* KMYU (MNT 9) Salt Lake City, Utah (DMA 32)
* KEYE (CBS 42) Austin, Texas (DMA 44)
* WTVX (CW 34) West Palm Beach/Fort Pierce, Florida (DMA 38)
* WTCN-CA (MNT 50) West Palm Beach/Fort Pierce, Florida (DMA 38)
* WWHB-CA (AZTECA 48) West Palm Beach/Fort Pierce, Florida (DMA 38)
* WLWC (CW 28) Providence, Rhode Island/New Bedford, Massachusetts (DMA 53)
Sinclair’s David Smith said, “We are very excited about the acquisition of the Four Points television stations and welcome their employees into Sinclair. The stations, which are in prime middle-markets, are a perfect complement to our portfolio of assets and TV footprint. 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.”
Since no new in-market station combinations are created by the deal, there are no obvious regulatory impediments to completing the deal. Closing is anticipated in the first quarter of 2012.