Tegna said it will acquire Midwest Television Inc.’s TV broadcast stations and two radio stations in San Diego for about $325 million in cash.
According to Tegna, the properties involved are KFMB-TV, the CBS affiliated station and KFMB-D2, a CW affiliate and radio broadcast stations KFMB-AM and KFMB-FM in San Diego.
“This is a marriage of two great broadcasting cultures. We have long admired our dedicated colleagues in San Diego and look forward to continuing the stations’ high-quality journalism, editorial independence and commitment to their local community,” said Tegna CEO Dave Lougee in a statement. “We have a proven ability to be a strategic and disciplined consolidator with a track record of acquiring profitable businesses at an attractive, accretive valuation. Looking ahead, we will continue to evaluate additional investments and select transactions to build on our growth and success with a focus on creating shareholder value.”
The deal follows Tegna’s strategy to beef up its portfolio in top markets, With about 1.1 million households, San Diego is the 29th largest U.S. TV market and the 17th largest radio market. The deal is valued at about 6.6 times Midwest’s expected 2017/2018 cash flow, including anticipated synergies. Tegna will finance the transaction through the use of available cash and borrowing under its existing credit facility and expects to close the deal in the first quarter of 2018.
“This transaction is a testament to the outstanding value our employees have created serving the San Diego community,” Midwest’s president and owner Elisabeth Kimmel said in a statement. “Having owned these properties for over 55 years, our family believed it imperative to find an excellent steward for television and radio stations that the community has embraced as part of the fabric of San Diego. We have found such a partner in Tegna, an innovative media company that shares our commitment to the highest levels of journalistic integrity and serving the greater good of the community. We welcome Tegna to San Diego with the knowledge that their values, resources and community leadership will serve our employees, consumers and customers for decades to come.”