Gray joins blockbuster parade with Hoak buy

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Gray TelevisionAll told, $342.5M will change hands in a deal that involves five different companies – but the core of the deal is the acquisition of Hoak Media LLC by Gray Television, with partner corporation Excalibur Broadcasting also in on the buy.


Also on the seller side of the table is Parker Broadcasting and Prime Cities Broadcasting.

$335M of the deal involves Gray/Excalibur, while $7.5M is exclusively between Excalibur and Prime.

It puts Gray into five new markets and adds four to the Excalibur portfolio. However, a station headed to Excalibur in the Grand Junction-Montrose CO DMA will have to be spun off to a 3rd – uh, make that a 6th party.  Gray will also have to sell a station in that DMA, as well as the one in Panama City FL.

“We are thrilled to have the opportunity to bring the Hoak, Parker and Prime Cities television stations into the Gray community,” said Hilton Howell, Gray’s President and CEO.  “These transactions will yield impressive synergies, many of which are unique to Gray given how well the stations’ locations, operations and culture complement our own.”

Mr. Howell continued, “Gray’s existing stations will make the acquired stations stronger, while the acquired stations will make our existing stations better.”

“Our cultures and operating philosophies are very similar, and we share a strong commitment to local news excellence and a deep sense of service to the communities in which our stations are located,” commented Eric Van den Branden, Hoak Media’s President and Chief Executive Officer.  “We will clearly miss working with some of the most talented and dedicated people in broadcasting, but we know we leave our employees in capable hands with Gray Television.”

From Gray, here are the stations being acquired. Stations with an asterisk are satellites.

Hoak to Gray:
Sioux Falls SD (DMA 111)
KSFY ABC/CW
KABY* ABC
KPRY* ABC
Fargo-Valley City ND (DMA 116)
KVLY NBC
Monroe-El Dorado LA (DMA 137)
KNOE CBS/CW
Minot-Bismarck-Dickinson ND (DMA 145)
KFYR NBC
KMOT* NBC
KUMV* NBC
KQCD* NBC
Alexandria LA (DMA 179)
KALB NBC/CBS
Grand Junction-Montrose CO (DMA 185)
KREX CBS
KREY* CBS
KREG* CBS
North Platte NE (DMA 208)
KNOP NBC
KIIT-LP FOX

Hoak/Parker to Excalibur
Lincoln-Hastings-Kearney (DMA 105)
KHAS NBC
Fargo-Valley City ND (DMA 116)
KXJB CBS
Monroe-El Dorado LA (DMA 137)
KAQY ABC
Grand Junction-Montrose CO (DMA 185)
KFQX FOX

Prime to Excalibur
Minot-Bismarck-Dickinson ND (DMA 145)
KNDX FOX
KXND* FOX

Gray stated, “Upon completion of all previously announced and pending transactions, we will own and/or operate television stations in 39 television markets broadcasting a total of 123 distinct channels of programming, including 70 channels affiliated with one of the Big Four Networks.  At that time, Gray will own the number-one ranked television station in 29 of the 39 markets as well as the number-one or number-two ranked television station operations in 38 of 39 markets.  Gray then will operate “duopolies” (that is, two Big Four network affiliated channels) in a total of 16 markets and reach approximately 7.33 percent of U.S. television households.”

Gray said it expects to benefit from significant free cash flow in this instantly accretive deal, and further expects to reap about $5M in synergies. It pegged the multiple at 6.8X.