Nexstar intends to pay a total of $130M for four television stations from West Virginia Media Holdings.
The purchase price represents some 6.3 times cash flow.
The four television stations are: WOWK, Charleston/Huntington, WVNS, Bluefield/Beckley and WBOY, Clarksburg/Weston, all in West Virginia. The fourth station is WTRF licensed to Wheeling, W.V. and Steubenville, Ohio. Most are CBS affiliates, with the exception of WBOY, which is an NBC affiliate.
The West Virginia and eastern Ohio stations complement Nexstar’s Mid-Atlantic holdings geographically “while presenting significant financial and operating savings,” according to the broadcaster. The broadcaster also anticipates high levels of political ad activity in these regions in 2016.
It’s also calculated the new stations would bring in some $15M in free cash flow in 2015/2016 of about 23 cents per share.
Nexstar expects the transaction to be immediately accretive to its operating results.
WVMH CEO Bray Cary considers the deal a strengthening of the West Virginia media network the company started 14 years ago. The addition of Nexstar’s WHAG(TV), Hagerstown, Md., the new station network will provide viewer’s coverage of the growing eastern panhandle and Washington, DC area, he says. Nexstar’s digital products will create opportunities for the network’s advertisers and marketing partners, he added.
Under the terms of the agreement, Nexstar will enter into a Time Brokerage Agreement with WVMH once it receives DOJ approval, which will receive the stations’ broadcast cash flow and pay an annual fee to WVMH. The TBA will extend until the broadcast assets and FCC licenses are transferred, which is expected to occur in late 2016. Nexstar intends to finance the transaction with cash generated from operations and borrowings under its senior credit facilities.
If the deal closes, that brings Nexstar’s total television holdings to 115 stations.