Broadcaster Gray Television Monday has acquired smaller family-owned Quincy Media for $925 million in cash in a deal that will land it with stations in 102 markets reaching over 25% of U.S. TV households.
Atlanta-based Gray said Monday its portfolio will include the top-ranked stations in 77 markets and first or second-ranked in 93 markets according to Comscore’s average all-day ratings for 2020.
Gray shares were up 2.7% at $17.51 in mid-morning trade.
“We are honored and humbled to be selected by Quincy’s shareholders to acquire their terrific company,” said Hilton Howell, Jr., Gray’s executive chairman and CEO. “Gray will become a stronger company with an even larger platform of high quality television stations to better serve the public interest first.”
The deal follows a spate of acquisitions in the station space in recent years that has turned groups like Nexstar, Sinclair and EW Scripps into giants. Recently, Allen Media has been pursuing broadcasting deals.
“Many of our shareholders, board members and employees are descendants of two families who have been in the company for 95 years and in the media business for over 100 years. The focus has always been on serving our communities with the best in news, public service and community involvement. It is a legacy of which we are very proud,” said Ralph Oakley, CEO of the private Quincy, Illinois company that owns stations and local digital platforms in 16 markets primarily in the Midwest.
The companies noted that Gray and Quincy both maintain local control over programming and operational decisions, including in local news operations, programming, community engagement and public service.
Gray said the stations it will acquire are:
WPTA (ABC/NBC) and WISE (CW) in Fort Wayne, Indiana (DMA 104)
WEEK (NBC/ABC/CW) in Peoria, Illinois (DMA 118)
WREX (NBC/CW) in Rockford, Illinois (DMA 132)
KBJR (NBC/CBS) and KDLH (CW) in Duluth, Minnesota (DMA 136)
KTIV (NBC/CW) in Sioux City, Iowa (DMA 147)
KTTC (NBC/CW) in Rochester-Mason City, Minnesota-Iowa (DMA 156)
WBNG (CBS/CW) in Binghamton, New York (DMA 158)
WVVA (NBC/CW) in Bluefield-Beckley, West Virginia (DMA 162)
WGEM (NBC/FOX/CW) in Quincy, Illinois (DMA 172)
To satisfy regulators, Gray will be divesting Quincy stations in markets where it owns overlapping stations, including Tucson, Arizona, Madison, Cedar Rapids, Iowa and a few others.
Wells Fargo Securities will be marketing the stations to third parties in transactions that could be cash sales, station swaps or a combination of both.
Gray will acquire Quincy’s Heroes & Icons affiliate WSJV in South Bend, Indiana and WGEM(AM)/-FM in Quincy, Illinois.
Gray will not acquire Quincy’s newspaper operations, which will be divested prior to closing. It intends to finance the transaction, net of divestiture proceeds, with cash on hand and/or new debt. Wells Fargo has provided a debt financing commitment for an incremental loan to finance up to the full purchase price of $925 million.
Gray anticipates that its expected strong free cash flow generation throughout 2021 will allow it to continue to deleverage following the closing and expects total leverage ratio, net of all cash and net of proceeds from divestiture sales, would approximate 4 times trailing eight-quarter operating cash flow.
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