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Gray to purchase WABI and WCJB
Posted on Friday, 17 February 2017 10:40
Gray Television has agreed to buy television programming and broadcasting services providers WABI-TV and WCJB-TV from Diversified Business Communications for a combined USD 85.00 million.
The transaction will be financed using cash and borrowings under the company's existing senior credit facility.
WABI in Bangor was Maine's first television station and currently is the nation's oldest continuously family-owned channel.
WCJB serves the college town of Gainesville which is home to the University of Florida.
Sullivan & Worcester and Wells Fargo & Company have both been hired to advise the seller on the deal, while Cooley will be assisting the buyer.
Completion is slated for during the second quarter of 2017.
Following closing, the stations will produce two-year, blended broadcast cash flow margins greater than 50.0 per cent.
The purchase is expected to be immediately free cash flow accretive and allow us to continue to de-lever our balance sheet.
In a separate announcement, Gray is looking for additional acquisitions.
The Georgia-headquartered buyer operates 100 stations across 54 television markets.
Gray, which was formerly known as Gray Communications Systems, was founded in 1897 and trades on the New York Stock Exchange.
The firm posted revenue of USD 574.85 million in the nine months ended 30th September 2016, a 34.4 per cent increase on USD 427.87 million in the corresponding timeframe of 2015.
Net profit totalled USD 26.44 million in the first three quarters of 2016 (Q1-Q3 2015: USD 24.31 million).
Last year, Gray inked an agreement to snap up US television broadcasters WDTV and WVFX from Withers Broadcasting for USD 26.50 million in cash.
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