Broadcast M&A Up in Q3

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SNLThe volume of broadcast station mergers in the third quarter hit $3.04 billion, more than double the total for the period from September 2014 through June 30, SNL Kagan is reporting.


TV station deals amounted to $2.61 billion, while radio transactions were $422.1 million.

But overall, the deal levels are “well below” those of the same period a year ago, according to SNL Kagan.

Year-to-date, at the end of September, radio registered a total of $663.4 million while TV deal announcements amounted to $2.75 billion.

Due to a number of high-ranking TV deals, the TV broadcast cash flow multiple on two-year average forward cash flow rose from 8.0x at the end of Q2 to 8.3x at the end of Q3. The radio multiple remained unchanged at 6.7x.

The quarter’s top deal announcement was the possible Media General Inc.’s $3.10 billion acquisition of Meredith Corp. At a 9.1x multiple of seller’s 2016/2017 broadcast cash flow, SNL Kagan values the 17 TV stations in 13 markets at $1.81 billion, which would make the deal the TV sector’s largest since Media General’s purchase of LIN Media LLC in March 2014.

However, this transaction might not take place, if Media General’s shareholders agree to a bid by Nexstar Broadcasting, announced on Sept. 28, to buy all of Media General for $4.1 billion. Nexstar’s offer is not included in the total deal volume numbers.

Q3’s top M&A news from the radio station sector was the merger of Alpha Media LLC and Digity LLC. Alpha Media paid $264 million for Digity’s 116 stations, which SNL Kagan estimates translates to year-forward seller’s cash flow multiples of 6.8x for the FM and 6.3x for the AM stations.