Meredith Corp to buy 3 TV stations for $408 million

Media Company Meredith Corp said it would buy three television stations from Gannett Co Inc and Sander Media for $407.5 million to expand its broadcast revenue and footprint.

Meredith said it expects the three stations - KTVK-TV and KASW-TV in Phoenix and KMOV-TV in St. Louis - to generate revenue of $105 million-$115 million, and add between 16-18 cents to its run-rate earnings per share in the first full year after closing.

Dwindling advertising revenue and audience numbers have pushed broadcasters to acquire more TV stations that have multiple revenue streams, including cable operators who pay retransmission fees to carry channels.

Meredith plans to aggressively grow its local TV station group through acquisitions that could eventually lead to a spin-off, Meredith's Chief Executive Stephen Lacy told Reuters in an interview earlier this month.

"These are high-performing stations and will add to our already strong cash flow," Meredith Chief Executive Stephen Lacy said in a statement. The acquisitions will add to the company's earnings immediately.

The deals are a part of Gannett's acquisition of television company Belo Corp for $1.5 billion in June, which was approved under the condition that it did not include KMOV-TV.

Gannett agreed to transfer ownership of six Belo stations in Phoenix and St. Louis to Sander Media last week because Gannett already owned stations in those markets.

Meredith said it expects to finance the transactions with new bank and private placement financing and that the deals are expected to close during the first half of 2014.

The company added that the license and some assets of KASW-TV would be bought by Sagamore Hill of Phoenix LLC.

Meredith will provide some services for the operation of the station.

The deal is expected to add about 43 percents per share to Gannett's adjusted earnings in 2014.

Following the Gannett-Belo deal, Tribune Co said in July it would buy 19 TV stations from Local TV Holdings LLC for $2.73 billion.

Sinclair Broadcast Group Inc agreed to acquire eight television stations from the Allbritton family for $985 million.

Source: http://cablequest.org/news/international-news/item/3891-meredith-corp-to-buy-3-tv-stations-for-$408-million.htmlSource: http://cablequest.org/news/international-news/item/3891-meredith-corp-to-buy-3-tv-stations-for-$408-million.html