Beasley Broadcast Group, Inc. (Nasdaq:BBGI) (“the Company” or
“Beasley”), a large- and mid-size market radio broadcaster, and
Greater Media, Inc. (“Greater Media”) today announced that they
have entered into a definitive agreement pursuant to which Beasley
will acquire all of the outstanding stock of Greater Media for an
aggregate consideration of approximately $240 million, subject to
adjustments. Under the terms of the agreement, Greater
Media shareholders are expected to receive approximately $100
million in cash and approximately $25 million in shares of the
Company’s Class A common stock (at a fixed value of $4.61 per
share). In addition, the shareholders of Greater Media will
receive the net cash proceeds from the sale of its tower assets,
estimated to be approximately $20 million. Beasley will
refinance approximately $80 million of debt of Greater Media.
In connection with the acquisition, Beasley will initially
acquire 21 radio stations in seven markets including four new
markets (Detroit, MI; Middlesex, NJ; Monmouth, NJ; and, Morristown,
NJ) and three markets where the Company has existing operations
(Philadelphia, PA; Boston, MA; and, Charlotte, NC).
Excluding transaction costs, the transaction is
expected to be accretive to Beasley’s operating results immediately
upon closing (inclusive of expected financial and operating
synergies and the planned divestiture of certain stations).
Beasley intends to fund the acquisition through borrowings under a
new credit facility that Beasley expects to enter into in
connection with the closing of the acquisition, together with cash
and cash equivalents available to the Company and the issuance of
Class A common stock as described above. RBC Capital Markets
and U.S. Bank have provided committed financing in support of the
acquisition.
The acquisition of Greater Media is expected to
significantly broaden Beasley’s local radio broadcasting and
digital platform, scale and revenue base by adding stations that
are geographically complementary to the Company’s operating base
while presenting the opportunity for significant financial and
operating synergies with its existing station portfolio and digital
operations. Upon closing, Beasley’s portfolio of stations
that it owns and operates (prior to planned divestitures) is
expected to expand to 73 stations (52 FM and 21 AM) in 16
markets. Giving effect to the transaction on a pro forma
basis as of December 31, 2015, Beasley’s net revenue would have
increased from approximately $106 million to approximately $247
million. Beasley intends to divest certain radio stations in
Charlotte, NC to obtain FCC approval of the proposed
transaction.
Caroline Beasley, Interim Chief Executive
Officer & Chief Financial Officer of Beasley Broadcast Group,
commented, “The acquisition of Greater Media’s broadcasting and
related digital assets represents a transformational growth
opportunity for Beasley and is strategically and financially
compelling for our shareholders. The transaction increases
our broadcast portfolio by approximately 40% and more than doubles
our audience reach, giving us both market leading stations and
great brands.
“Throughout Beasley Broadcast Group’s 55-year
history, we have actively managed our station portfolio with the
goal of providing our local communities with great entertainment
and critical information, diversifying our operations, managing
risk and improving financial results. Similarly, Greater
Media and the Bordes family have a 60-year track record of serving
local communities and developing new technology and services to
improve media communications. A focus on strong core
programming and targeted localism has been the foundation of both
companies’ operating philosophies, ratings strength and market
leadership. As such, we intend to implement our proven
strategy of focusing on local programming and effective digital
media marketing solutions across the two companies as well as best
practices from our existing operations with those from Greater
Media.”
Greater Media Chairman and Chief Executive
Officer Peter H. Smyth commented, “We share with Beasley a common
appreciation for the enduring strength of local radio broadcasting
and we are delighted that our stations will become part of
Beasley’s expanded footprint. As part of the Beasley
portfolio, we believe our stations will be positioned extremely
well for future growth and that our team members, customers and the
communities we serve will continue to thrive.
“Our employees have provided the skills and
talent necessary to drive our ongoing growth and success over the
years and we are proud of this heritage. I am thankful for
their hard work and dedication and am confident they will continue
to make many valuable contributions as part of a larger
organization. I look forward to working with the Beasley team to
bring our companies together to realize the power of this
compelling combination and ensure a smooth transition.”
The transaction, which has been approved by the
boards of directors of both Beasley and Greater Media, is subject
to FCC approval and other regulatory approvals (including the
termination or expiration of the applicable Hart-Scott-Rodino
waiting period) and other customary closing conditions.
Upon completion of the transaction, expected in
the fourth quarter of 2016, Beasley shareholders and Greater Media
shareholders will hold approximately 81% and 19%, respectively, of
Beasley’s outstanding shares. In addition, Greater Media
shareholders will have the right to appoint one member to the
Beasley Board of Directors which will expand the size of the Board
to nine members.
RBC Capital Markets is acting as financial
advisor to Beasley Broadcast Group and Latham & Watkins LLP is
acting as its legal counsel. Rockdale Partners is acting as
financial advisor to Greater Media and Debevoise & Plimpton LLP
is acting as its legal counsel.
About Beasley Broadcast
GroupCelebrating its 55th anniversary this year, Beasley
Broadcast Group, Inc., (www.bbgi.com) was founded in 1961 by George
G. Beasley who remains the Company’s Chairman and Chief Executive
Officer. Today, Beasley Broadcast Group owns and operates 52
stations (34 FM and 18 AM) in twelve large- and mid-size markets in
the United States.
About Greater MediaGreater
Media celebrated its 60th Anniversary in broadcasting on March 31,
2016. Owned by the Bordes family, the Company was founded in 1956
by Yale classmates Peter A. Bordes and Joseph Rosenmiller and grew
to become one of the premiere privately-held broadcast companies in
America. From the ownership of a single radio station in
Southbridge, Massachusetts, Greater Media built a diversified
portfolio of successful communications companies.
Important Additional
Information
Beasley will file an Information Statement and
other relevant documents concerning the proposed transaction and
related matters with the Securities and Exchange Commission
(“SEC”). The Information Statement and other materials filed with
the SEC will contain important information regarding the
transaction and the issuance of Beasley’s Class A common stock in
connection with the transaction. SHAREHOLDERS ARE ENCOURAGED TO
READ THE INFORMATION STATEMENT AND OTHER MATERIALS THAT THE COMPANY
FILES WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE TRANSACTION, THE ISSUANCE
OF THE SHARES OF CLASS A COMMON STOCK IN THE TRANSACTION AND
RELATED MATTERS. You will be able to obtain the Information
Statement, as well as other filings containing information about
the Company, free of charge, at the website maintained by the SEC
at www.sec.gov. Copies of the proxy statement and other filings
made by the Company with the SEC can also be obtained, free of
charge, by directing a request to Beasley Broadcast Group, Inc.,
3033 Riviera Drive, Suite 200, Naples, Florida 34103, Attention:
Corporate Secretary.
Note Regarding Forward-Looking
Statements:This release contains
“forward-looking statements” within the meaning of the “safe
harbor” provisions of the Private Securities Litigation Reform Act
of 1995. These forward-looking statements are based upon
current beliefs and expectations of the Company’s management and
are subject to known and unknown risks and uncertainties.
Words or expressions such as “expects,” “anticipates,” “intends,”
“plans,” “believes,” “estimates” “may,” “will,” “plans,”
“projects,” “could,” “should,” “would,” “seek,” “forecast,” or
other similar expressions help identify forward-looking statements.
Factors that could cause actual events to differ include, but are
not limited to:
- the risk that the transaction may not be completed;
- the ability of the Company to obtain debt financing for the
transaction;
- the ability to successfully combine the businesses of Beasley
and Greater Media;
- the ability of the Company to achieve the expected cost
savings, synergies and other benefits from the proposed transaction
within the expected time frames or at all;
- the incurrence of significant transaction and other related
fees and costs;
- the incurrence of unexpected costs, liabilities or delays
relating to the transaction;
- the risk that the public assigns a lower value to Greater
Media’s business than the value used in negotiating the terms of
the transaction;
- the effects of the transaction on the interests of the
Company’s current stockholders in the earnings, voting power and
market value of the Company;
- the risk that the transaction may not be accretive to the
Company’s current stockholders;
- the risk that the transaction may prevent the Company from
acting on future opportunities to enhance stockholder value;
- the impact of the issuance of the Class A common stock in
connection with the transaction;
- the risk that any goodwill or identifiable intangible assets
recorded due to the transaction could become impaired;
- the risk due to business uncertainties and contractual
restrictions while the transaction is pending that could disrupt
the Company’s business;
- the risk that a closing condition to the proposed transaction
may not be satisfied;
- the occurrence of any event, change or other circumstances that
could give rise to the termination of the transaction; and
- other economic, business, competitive, and regulatory factors
affecting the businesses of Beasley and Greater Media generally,
including those set forth in Beasley’s filings with the SEC,
including its annual reports on Form 10-K, quarterly reports on
Form 10-Q, current reports on Form 8-K, and other SEC filings.
Actual results, events and performance may
differ materially. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as
of the date hereof. The Company undertakes no obligation to release
publicly the result of any revisions to these forward-looking
statements that may be made to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated
events.
CONTACT:
B. Caroline Beasley, Interim Chief Executive
Officer & Chief Financial Officer
Beasley Broadcast Group, Inc.
239/263-5000
Joseph N. Jaffoni
JCIR
212/835-8500 or bbgi@jcir.com
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