TEGNA’s $326 Million Acquisition of KFMB-TV along with San Diego radio stations KFMB-AM and KFMB-FM from Midwest Television

Nixon Peabody represented TEGNA as M&A counsel in this transaction. Covington & Burling served as FCC counsel for TEGNA.

TEGNA Inc. (NYSE: TGNA) and Midwest Television, Inc. have entered into a definitive agreement under which TEGNA will acquire, for $325 million in cash, KFMB-TV, the CBS affiliated station in San Diego, KFMB-D2 (CW) and radio broadcast stations KFMB-AM and KFMB-FM in San Diego.

Through this transaction, TEGNA adds a strong market to its portfolio of big four affiliates in top markets. San Diego is the 29th largest U.S. TV market with 1.1 million households and the 17th largest radio market. KFMB-TV is the long-standing market leader in San Diego. It leads the market in audience ratings and share across all demographics and is number one in news across all major time slots. KFMB-D2, The CW San Diego, operates as a digital subchannel of KFMB. KFMB-TV and KFMB-D2 share studio facilities in the Kearny Mesa section of San Diego with KFMB 760 AM talk radio and KFMB-FM, which offers an adult rock hits format.

TEGNA’s resources will provide an enhanced level of innovation to San Diego consumers and advertisers, driven by industry-leading audience and advertiser-focused initiatives. TEGNA will achieve synergies driven by mechanical revenue and cost efficiencies.

The transaction, structured as an asset purchase, represents an attractive purchase price multiple of 6.6 times average expected 2017/2018 EBITDA, including expected run rate synergies and tax benefits. TEGNA expects the transaction to be accretive to EPS by a few cents within the first 12 months after close, and immediately accretive to free cash flow.

TEGNA will finance the transaction through the use of available cash and borrowing under its existing credit facility. The acquisition is subject to customary regulatory approvals and closing conditions, and is expected to close in the first quarter of 2018.

TEGNA Inc. (NYSE: TGNA) is an innovative media company that serves the greater good of our communities. With 46 television stations in 38 markets, TEGNA delivers relevant content and information to consumers across platforms. It is the largest owner of top 4 affiliates in the top 25 markets, reaching approximately one-third of all television households nationwide. Each month, TEGNA reaches 50 million adults on-air and 35 million across its digital platforms. The company, led by David T Lougee, Nicholas Lehman and Doug Armstrong, in 2016 recorded $3.341 Billion Revenues.

Nixon Peabody advised Tegna Inc. with John Partigan (Picture), Brian Kopp, Michael Hausknecht, Allan Floro, Justin Thompson, Sean Clancy, Pierce Han, Erin Kansy and Carolyn Lowry.

Involved fees earner: John Partigan – Nixon Peabody LLP; Pierce Haesung Han – Nixon Peabody LLP; Carolyn Lowry – Nixon Peabody LLP; Sean Clancy – Nixon Peabody LLP; Allan Floro – Nixon Peabody LLP; Erin Kansy – Nixon Peabody LLP; Justin Thompson – Nixon Peabody LLP; Brian Kopp – Nixon Peabody LLP;

Law Firms: Nixon Peabody LLP;

Clients: TEGNA Inc.;

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Author: Ambrogio Visconti