Nexstar Acquires 12 Newport Stations for $285.5 Million

Group will grow, but still seeks to sell non-core stations

By Michael Malone -- Broadcasting & Cable, 7/19/2012 11:25:48 AM

Nexstar Broadcasting and Mission Broadcasting are partnering to acquire 12 TV stations from Newport Television for $285.5 million. Nexstar will acquire 10 stations and digital services outfit Inergize Digital and Mission will acquire two stations in Little Rock.

In separate deals, Newport parent Providence Equity Partners is selling six stations to Sinclair and four to Cox.

"The planned acquisition of the Newport stations substantially broadens Nexstar's local television broadcasting platform with stations that are geographically complementary to and diversify Nexstar's operating base," said Nexstar in a statement, "while also presenting significant financial and operating synergies with the company's existing portfolio."

The stations headed to Nexstar are KTVX-KUCW Salt Lake City, WPTY-WLMT Memphis, WSYR Syracuse, WBGH-WIVT Binghamton, WETM Elmira, WJKT Jackson (Tenn.) and WWTI in Watertown (N.Y.).

Mission gets KLRT-KASN Little Rock.

"The Newport transaction is a transformational event for Nexstar from a strategic and operational standpoint and will bring very significant free cash flow accretion to the company immediately upon closing," said Perry Sook, Nexstar chairman, president and CEO. "The acquisition significantly expands our revenue and operating base with stations where we can quickly apply our operating and management disciplines to meaningfully improve their performance which we believe will drive strong cash flow growth."

The transaction would increase Nexstar's portfolio of stations that it owns, operates, programs or provides services for to 67 stations in 40 markets, reaching 11.4% of all U.S. television households.

Nexstar announced a year ago that it was exploring a possible sale of its stations. Sook said Nexstar will continue to look to sell some assets. "In the current environment we see further opportunities to optimize our portfolio through strategic acquisitions and divestitures," he said. "In this regard, and reflecting another outcome of the strategic review process, we are in discussions to divest certain stations in smaller, non-core markets to allow us to best maximize the value of our intellectual capital and operating management."

Sook said the purchase price for the Newport stations is approximately 5.5 times the stations' average 2011/2012 pro-forma projected cash flow and approximately 5 times their 2012 pro-forma projected cash flow.