Nexstar Swings Deal for Fresno, Burlington Stations

Shells out $52.5 million for five stations

By Michael Malone -- Broadcasting & Cable, 11/5/2012 10:18:12 PM

Nexstar Broadcasting has entered into an agreement to acquire KGPE Fresno and KGET-KKEY Bakersfield from Newport Television for $35.4 million. KPGE is a CBS affiliate, while KGET airs NBC and CW, and KKEY is a low-power Telemundo.

Separately, Nexstar and closely aligned Mission Broadcasting worked out an agreement with Smith Media to acquire WFFF-WVNY Burlington, a Fox-ABC pair, for $17.1 million. Nexstar and Mission will enter into a local services agreement to provide sales and other services to WVNY upon consummation of the transaction.

The transactions are subject to FCC approval and are expected to close in the first quarter of 2013.

"These transactions are consistent with our criteria for acquisitions that further strategically diversify our operations, create or present opportunities for virtual duopoly markets and which are financially accretive," said Perry Sook, Nexstar president and CEO.

The purchase price for the five stations is less than five times the average 2011/2012 pro-forma cash flow in aggregate, said Sook.

"We expect the combined acquisitions to increase our free cash flow by approximately 8% to 10% annually in each of the next two years," he added. "Under Nexstar and Mission's ownership the stations will realize additional retransmission revenues as well as synergistic operating improvements, and on a pro-forma basis the acquisitions are both immediately accretive to results and leverage neutral on a debt-to-cash-flow basis."

Newport sold 22 stations to three groups, including Nexstar, in July.