Gannett has agreed to acquire six Texas stations from London Broadcasting for $215 million. The stations are KCEN Waco-Temple-Bryan, KYTX Tyler-Longview, KIII Corpus Christi, KBMT and subchannel KJAC in Beaumont-Port Arthur, KXVA Abilene-Sweetwater and KIDY San Angelo. They are a mix of NBC, CBS, ABC and Fox affiliates.
"The addition of these stations will expand Gannett's reach into some of the fastest growing markets in the nation and furthers our successful transformation into a diversified multimedia company,” said Gracia Martore (pictured), president and CEO of Gannett. “With more than 70% of London Broadcasting's advertising revenues driven by local advertisers, this acquisition will provide us access to attractive new markets in which we believe our local digital marketing services group, G/O Digital, will thrive."
The deal is subject to regulatory approval and is expected to close this summer. The London stations are expected to generate revenue of approximately $50 million in 2014, while the transaction is also expected to provide Gannett with what it called “certain tax efficiencies” related to the sale of KMOV St. Louis. Including expected synergies and the anticipated tax benefit, the purchase price implies a 6.7x average 2014/2015 EBITDA multiple.
"In a very short span of only five years, we and our partners at SunTx have established [London] as a leading operator of middle-market broadcasting television stations in the state of Texas," said Terry London, president of London Broadcasting. "We look forward to continuing to provide our customers with exceptional content through our ongoing ownership of several television stations in Texas and via LBC's other media properties."
Phil Hurley, London Broadcasting Company chief operating officer, will continue to lead the six stations after closing, reporting to Dave Lougee, president of Gannett Broadcasting. "We are pleased that several of our television stations will become part of Gannett and benefit from that organization's global strength and breadth," concluded London.
Gannett pulled off a massive deal for the Belo group in 2013.