Deal Magazine isn’t interested in broadcasting deals per se – it’s interested in deals, period. So it is impressive that the mag has named the acquisition of Citadel by Cumulus, along with rolling Cumulus Broadcasting into Cumulus Media, as the deal of the year.
The magazine summed it up thusly: “Seldom does an acquirer wind up with a stronger balance sheet after pulling off not one but two major acquisitions in a single quarter. But that’s what Cumulus Media Inc. managed to do in the third quarter of 2011 by snagging Citadel Broadcasting Corp. and bringing in the 75% of Cumulus Media Partners LLC it didn’t already own. What’s more, as an examination of pro formas reveals, the three-way tie-up simultaneously lowered Cumulus’ debt-to-Ebitda ratio to a manageable 4.2 from a wobbly 5.8.”
The magazine notes the shaky recent history of both Cumulus and Citadel. Citadel’s primary headaches traced to its acquisition of ABC Radio stations and subsequent descent into bankruptcy.
Cumulus suffered slings and arrows related to its involvement in the acquisition of Susquehanna Radio stations, with the hit being felt on its stock pricing.
RBR-TVBR observation: The radio industry as a whole has been through a very rough patch that in truth extends all the way back to the bursting of the dot.com bubble – other businesses that have only been hurting since 2008 are Johnny-come-latelies as far as radio is concerned. Cumulus deserves some sort of award for picking up some of the wreckage and using it to build a viable structure.