Meredith Corp. Strikes $407.5 Million TV Station Deal With Gannett
In response to concerns expressed by the Federal Communications Commission (FCC) following Gannett's acquisition of Belo, Gannett has agreed to sell three TV properties to MeredithCorp. in an all-cash, $407.5 million deal that the companies announced today. Gannett first announced its intention to acquire Belo in June for a total transaction price of $2.2 billion.
The three TV properties include the largest independent station in Phoenix as well as a CW affiliate station in Phoenix. These two stations will add to Meredith's existing CBS TV affiliate in Phoenix. Today's transaction also includes a CBS TV affiliate in St. Louis.
Commenting on the transaction, Meredith Chairman and CEO Stephen Lacy said in a statement, "These are high performing stations and will add to our already strong cash flow." Meredith said the deal will be immediately accretive to earnings, excluding closing costs, and will add $105 million to $115 million in annual revenues in the first, full year. In addition to the increase in annual revenues, Meredith expects the new properties will add between $0.16 a share and $0.18 a share in earnings.
Meredith's media properties serve the U.S. female demographic, and include magazines Family Circle, Ladies' Home Journal, and EveryDay With Rachel Ray, along with its broadcast and digital media assets. Meredith Local Media Group owns or operates 13 television stations that reach nearly 10% of U.S. television households, according to the company. The deal is expected to close in the first half of 2014, and is subject to customary closing conditions.
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