Nexstar Broadcasting Group, Inc. (Nasdaq:NXST) (“Nexstar” or
“the Company”) announced today that it entered into a definitive
agreement to acquire the equity interests and assets of KLAS-TV,
the CBS affiliate serving the Las Vegas, Nevada market for $145.0
million plus working capital from Landmark Media Enterprises, LLC
(“Landmark”). The proposed acquisition is expected to be
immediately accretive to Nexstar’s operating results immediately
upon closing and inclusive of all other previously announced
transactions, will expand the Company’s portfolio to 110 television
stations serving 58 markets in 23 states, reaching approximately
20.3 million television households or 18% of U.S. television
households.
Nexstar intends to finance the station acquisition with cash
generated from operations and borrowings under its senior credit
facilities and/or additional capital markets activities. The
transaction is subject to FCC approval and other customary
approvals, and is expected to close in the first half of 2015.
Commenting on the acquisition, Nexstar Broadcasting Group
President and Chief Executive Officer, Perry A. Sook said, “Nexstar
remains opportunistic in expanding our station platform for growth
and the acquisition of KLAS-TV in Las Vegas is consistent with our
strategic focus on identifying, executing and integrating accretive
transactions. Pro-forma for expected synergies, including
additional retransmission revenues, the purchase price for KLAS is
less than 6.0 times the average 2015/2016 pro-forma projected cash
flow. Under Nexstar’s ownership we intend to build on KLAS’s rich
tradition of local programming and local community involvement.
With an enhanced sales effort, additional retransmission revenues
and synergistic operating improvements, the acquisition, on a
pro-forma basis, is expected to add an average of approximately
$0.40 per share of free cash flow per year to Nexstar’s operating
results over the 2015/2016 period.
“Las Vegas represents a natural complement to our existing
operations in the Southwestern region of the United States. KLAS-TV
is presently operated by a single station owner, therefore
financial results under Nexstar’s ownership will benefit from our
scale, expense synergies and proven operating management
disciplines. Finally, with the post-closing implementation of
Nexstar’s strong local news programming, KLAS will be
well-positioned to capitalize on political spending in 2016
including the Presidential election and the Nevada U.S. Senate
race.”
According to the 2014 BIA Kelsey Television Yearbook the Las
Vegas, Nevada DMA is ranked as the 41st largest U.S. television
market.
Definitions and Disclosures Regarding non-GAAP Financial
InformationBroadcast cash flow is calculated as income from
operations, plus corporate expenses, depreciation, amortization of
intangible assets and broadcast rights (excluding barter) and loss
(gain) on asset disposal, net, minus broadcast rights payments.
Adjusted EBITDA is calculated as broadcast cash flow less
corporate expenses.
Free cash flow is calculated as income from operations plus
depreciation, amortization of intangible assets and broadcast
rights (excluding barter), loss (gain) on asset disposal, net, and
non-cash stock option expense, less payments for broadcast rights,
cash interest expense, capital expenditures and net cash income
taxes.
Broadcast cash flow and free cash flow results are non-GAAP
financial measures. Nexstar believes the presentation of these
non-GAAP measures are useful to investors because they are used by
lenders to measure the Company’s ability to service debt; by
industry analysts to determine the market value of stations and
their operating performance; by management to identify the cash
available to service debt, make strategic acquisitions and
investments, maintain capital assets and fund ongoing operations
and working capital needs; and, because they reflect the most
up-to-date operating results of the stations inclusive of pending
acquisitions, TBAs or LMAs. Management believes they also provide
an additional basis from which investors can establish forecasts
and valuations for the Company’s business.
About Landmark Media Enterprises LLCLandmark Media
Enterprises LLC is a privately held media company headquartered in
Norfolk, Virginia specializing in broadcasting, newspaper
publishing, internet publishing, software and data centers.
About Nexstar Broadcasting Group, Inc.Nexstar
Broadcasting Group is a leading diversified media company that
leverages localism to bring new services and value to consumers and
advertisers through its traditional media, digital and mobile media
platforms. Nexstar owns, operates, programs or provides sales and
other services to 80 television stations and 20 related digital
multicast signals reaching 46 markets or approximately 13.1% of all
U.S. television households. Nexstar’s portfolio includes affiliates
of NBC, CBS, ABC, FOX, MyNetworkTV, The CW, Telemundo, Bounce TV,
Me-TV, and LATV. Nexstar’s 48 community portal websites offer
additional hyper-local content and verticals for consumers and
advertisers, allowing audiences to choose where, when and how they
access content while creating new revenue opportunities.
Pro-forma for the completion of all announced transactions
Nexstar will own, operate, program or provides sales and other
services to 110 television stations and related digital multicast
signals reaching 58 markets or approximately 18.0% of all U.S.
television households.
Forward-Looking StatementsThis news release includes
forward-looking statements. We have based these forward-looking
statements on our current expectations and projections about future
events. Forward-looking statements include information preceded by,
followed by, or that includes the words "guidance," "believes,"
"expects," "anticipates," "could," or similar expressions. For
these statements, the Company claims the protection of the safe
harbor for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995.
The forward-looking statements contained in this news release,
concerning, among other things, changes in net revenue, cash flow
and operating expenses, involve risks and uncertainties, and are
subject to change based on various important factors, including the
impact of changes in national and regional economies, our ability
to service and refinance our outstanding debt, successful
integration of acquired television stations (including achievement
of synergies and cost reductions), pricing fluctuations in local
and national advertising, future regulatory actions and conditions
in the television stations' operating areas, competition from
others in the broadcast television markets served by the Company,
volatility in programming costs, the effects of governmental
regulation of broadcasting, industry consolidation, technological
developments and major world news events. Unless required by law,
we undertake no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise. In light of these risks, uncertainties and
assumptions, the forward-looking events discussed in this news
release might not occur. You should not place undue reliance on
these forward-looking statements, which speak only as of the date
of this release. For more details on factors that could affect
these expectations, please see our filings with the Securities and
Exchange Commission.
Nexstar Broadcasting Group, Inc.Thomas E. Carter,
972-373-8800Chief Financial OfficerorJCIRJoseph Jaffoni or Jennifer
Neuman, 212-835-8500nxst@jcir.com
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