On June 11 RBR+TVBR first told readers that TEGNA is adding to its stable of properties by acquiring the NBC affiliate in Indianapolis; the CBS affiliate in Columbus, Ohio; and an AM/FM combo in the Buckeye State’s capital city.
The deal just closed.
As such, the company formerly known as Gannett has completed its $535 million acquisition of Dispatch Broadcast Group’s TV and radio properties in the two Midwestern markets, linked by I-70.
TEGNA is now the owner of WTHR-13 in Indianapolis and WBNS-10 in Columbus, as well as Sports WBNS-FM “97.1 The Fan” and ESPN Radio affiliate WBNS-AM 1460.
“WTHR and WBNS are broadcasters of the highest caliber, and a natural fit for TEGNA as we expand our portfolio of Big Four affiliates in top markets,” said TEGNA President/CEO Dave Lougee. “These acquisitions further enhance our commitment to excellence in local journalism while creating value for our shareholders.”
The deal also gives TEGNA ownership of two more radio stations, doubling its holdings in audio broadcasting. Midwest Television in December 2017 agreed to sell KFMB-AM & FM and KFMB-8 in San Diego to TEGNA for $325 million.
The Dispatch transaction was structured as a stock purchase, and represents what TEGNA calls “a compelling purchase price multiple for the company of 7.9x expected average 2018-2019 EBITDA, including run rate synergies.”
TEGNA expects the transaction to be EPS accretive within a year and immediately accretive to free cash flow per share.
TEGNA financed this transaction through the use of available cash and borrowing under its existing credit facility. Leverage is expected to increase to approximately 4.9 times, inclusive of the previously announced acquisition of the Nexstar-Tribune divestiture stations. Substantially all of TEGNA’s free cash flow will be used to reduce debt, reducing total leverage to approximately 4.1 times by the end of 2020. As previously announced, share repurchases will remain suspended throughout 2020 to focus on reducing debt.
