More applause for acquisitive Sinclair


SBG / Sinclair Broadcast GroupSinclair Television Group was fully expected to buy more television stations, and its latest entry in the M&A market for Fisher Communications has earned it an ovation from Wall Street umpire Wells Fargo.

The company is rated to outperform.

According to analyst Marci Ryvicker, a lot of projections for the company go up. Revenue is now expected to be in the $1.43B-$1.84B range, up from $1.37B-$1.62B; EBITDA to $506M-$721M from $489M-$663M; and earnings per share to $1.52-$2.97 from $1.44-$2.69.

The multiple attached to the deal works out to 6.4x 2011/2012 EBITDA.

Further, the company should be able to continue chipping away at its leverage level, regardless of which of a number of finance options it elects to use to complete the Fisher deal.

Due to the way the television national ownership caps are computed, Sinclair’s UHF stations only count half what a VHF station does in terms of households reached. The upshot of that is that even though Sinclair will reach 33.7% of all US TV households on a de facto basis, as far as the FCC is concerned the reach is only about 18%. That gives it ample room to continue buying underneath the 39% national cap.

Sinclair owned and operated radio stations in the past and has indicated its intention to hang on to the quartet it is getting in Seattle.