KARK's Parent Buys LR Equity Station
Source: TV Newsday Nexstar Broadcasting Group announced today that it is buying MNT affiliate KWBF Little Rock, Ark. (DMA 56), for $4 million from Equity Broadcasting Corp.
The proposed acquisition will give Nexstar a duopoly in the market; it also owns KARK, the NBC affiliate.
Upon completion of the acquisition Nexstar will own, operate, program or provide services to more than one station in 19 of the 29 markets in which it operates. KWBF will be the 51st television station that Nexstar owns or for which it provides sales, programming and other services.
The seller, Equity, has been selling stations and its interest in diginet Retro Television Network this year to resolve financial troubles.
Commenting on the agreement, Nexstar Broadcasting Group President-CEO Perry A. Sook said, "This transaction reflects Nexstar's long-term strategy of identifying accretive acquisitions and prudently expanding our portfolio by operating multiple stations in concentrated geographic areas. Under Nexstar's ownership, KWBF-TV will realize additional retransmission revenues and we'll achieve operating and financial synergies between KARK-TV and KWBF-TV. Post-closing, our immediate strategies will focus on leveraging our existing local sales teams, award-winning local news and e-Media operations across both stations. On a pro-forma basis the purchase price represents a multiple of less than six times the last twelve months' cash flow. As such, the acquisition is expected to be accretive to the company which will allow for further balance sheet de-leveraging."
Nexstar intends to finance the acquisition through cash on hand. Pro-forma for the transaction, Nexstar said it is on track to end 2008 with a total leverage ratio of approximately 6 times compared to its permitted leverage covenant of 6.5 times at Dec. 31, 2007.
The transaction, which is subject to FCC approval, is expected to close in the first half of 2009.