Nexstar Media Group, Inc. (Nasdaq: NXST) (“Nexstar” or the
“Company”) announced today that it entered into a definitive
agreement to acquire LKQD Technologies (“LKQD”), a leading
independent video advertising infrastructure company, for
approximately $90 million cash, subject to working capital and
other adjustments including a minimum cash balance of $10 million,
and a contingent earn out payment based on LKQD’s performance at
the end of two years under Nexstar’s ownership. The transaction is
expected to be immediately accretive to Nexstar’s operating results
and free cash flow, does not materially alter the Company’s
leverage position and will be financed with cash generated from
operations and funds provided by the Company’s revolving credit
facility.
Founded in 2014 by industry veterans, LKQD Technologies’ video
advertising platform has the largest reach in the US to viewers
across digital devices, (comScore Video Metrix®, Video Ad Ecosystem
rankings, August, 2017). The acquisition of LKQD substantially
broadens and diversifies Nexstar Digital’s portfolio with
industry-leading, brand safe systems and technologies that are
complementary to its current offerings of leading digital solutions
and services for media publishers, and compelling and effective
multi-platform marketing solutions for local and national
advertisers.
LKQD provides enterprise digital video advertising technology
infrastructure for publishers and advertisers on all screens
reaching approximately 115 million US online video viewers across
desktop, mobile-web, mobile-app and connected TVs. Designed for
flexibility, scalability and speed, LKQD’s Infrastructure as a
Service (IaaS) technology provides end-to-end systems for ad
serving, mediation, programmatic auctions and advanced reporting—
allowing publishers to book, manage, optimize and track their
operations in real-time from one dashboard.
LKQD’s large-scale, diversified video supply combined with
Nexstar's robust audience reach across 170 stations and 100 U.S.
markets and significant hyper-local digital/ mobile platforms, will
create new video opportunities which will allow Nexstar's
advertising clients to target their customers across both the
television and digital video landscapes. Over the past twelve
months LKQD expanded its technology to meet increasing demand for
its products and solutions among digital publishers, media partners
and advertisers. As a result, in the first half of 2017, LKQD
tripled the number of customers using its platform and generated
year-over-year gross revenue growth of 180%, outpacing overall
video advertising industry revenue growth by approximately 8x.
Perry A. Sook, Chairman, President and Chief Executive Officer
of Nexstar added, “Our acquisition of LKQD is consistent with our
long-term strategic and financial growth objectives for Nexstar
Digital as we unify, expand and invest in our technology platform
to optimize results for our clients, while developing new revenue
opportunities. By adhering to our disciplined acquisition and
integration criteria, we are acquiring the leading, fast-growing,
profitable, online video advertising business at an attractive,
accretive valuation. Looking ahead, we continue to evaluate
additional digital investments and select accretive transactions to
drive the next phase of growth and success for Nexstar
Digital.”
Gregory R. Raifman, President of Nexstar Digital, commented,
“The acquisition of LKQD significantly strengthens and expands
Nexstar Digital’s product offerings with flexible and scalable
end-to-end technology infrastructure systems that enable
cross-device ad delivery with multi-dimensional analytics and
reporting— giving buyers and sellers the power to efficiently reach
audiences across all screens and devices. LKQD’s rapidly growing
revenue, expanded client base and market-leading enterprise video
ad technology infrastructure are key differentiators and represent
an excellent strategic fit with Nexstar Digital’s leading local
digital marketing tools, content monetization solutions and digital
agency services.
“Importantly, in an environment where brands and ad buyers are
rightfully concerned with online ad safety, LKQD’s inventory is
among the highest quality in the ecosystem. This focus results in
industry-leading metrics with respect to mitigating fraudulent
traffic and ensuring brand safety. LKQD brings to Nexstar Digital a
leading, fast-growing, profitable, online video advertising
business that will enable us to further improve our competitiveness
with other media and deliver more brand safe solutions to
advertisers and brands.”
Senior members of the LKQD management team, including CEO and
Co-Founder Brian DeFrancesco and CTO and Co-Founder Christophe
Clapp, have entered into employment agreements with Nexstar and
LKQD will continue to operate its growing business as a division of
Nexstar Digital.
Brian DeFrancesco, CEO of LKQD stated, “This is a win-win for
clients on both sides, as Nexstar’s suite of local and national
digital marketing products, content monetization solutions and
digital services combined with LKQD’s end-to-end digital video
advertising infrastructure technology, will allow small and
mid-sized media publishers and businesses to maximize revenues
across every available channel. Nexstar Digital has a strong
position in the rapidly growing digital media and advertising
technology market and we are excited to join their team as
Nexstar’s resources and expertise will help power LKQD’s next phase
of growth as we continue to expand our brand, technology
capabilities and market presence."
The transaction is expected to close late in 2017 or the first
quarter of 2018 and is subject to Hart-Scott-Rodino (HSR) approval
and other customary closing conditions.
About Nexstar Media Group, Inc.
Nexstar Media 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 170 television stations and related digital
multicast signals reaching 100 markets or approximately 39% of all
U.S. television households. Nexstar’s portfolio includes primary
affiliates of NBC, CBS, ABC, FOX, MyNetworkTV and The CW. Nexstar’s
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. For more information please visit
www.nexstar.tv.
About Nexstar Digital LLC
Nexstar Digital LLC, a wholly-owned subsidiary of Nexstar Media
Group, Inc. (Nasdaq: NXST), offers media companies and advertisers
a comprehensive suite of leading digital solutions and services
focused on optimizing audience targeting, user engagement and the
overall performance of online, mobile and multimedia content and
marketing campaigns. Nexstar Digital’s enterprise-class publishing
platforms, mobile video monetization technology and professional
digital agency services deliver powerful digital advertising and
content monetization solutions to clients across the United States.
Nexstar Digital products include HYFN, Mass2, and Lakana.
For more information please visit nexstar.tv/digital.
About LKQD Technologies
LKQD builds technology that improves video advertising. The
Company’s open infrastructure powers a flexible and scalable
end-to-end technology stack that enables digital video sellers and
buyers to build and grow their businesses. LKQD’s Infrastructure as
a Service (IaaS) technology provides a suite of integrated
solutions from centralized ad serving, data management and advanced
reporting, to highly scalable inventory and demand. Hundreds of
companies leverage LKQD’s technology to power their entire video
advertising business and customize solutions to efficiently scale
across mobile, desktop, and connected TV.
Forward-Looking Statements
This communication 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, Nexstar 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 communication,
concerning, among other things, future financial performance,
including 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, the ability to service and
refinance our outstanding debt, successful integration of acquired
television stations and digital businesses (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, volatility in
programming costs, the effects of governmental regulation of
broadcasting, industry consolidation, technological developments
and major world news events. Nexstar undertakes 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 communication 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 Nexstar’s
other filings with the SEC.
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version on businesswire.com: http://www.businesswire.com/news/home/20171207005247/en/
Nexstar Media Group, Inc.Thomas E. Carter, 972-373-8800Chief
Financial OfficerorJCIRJoseph Jaffoni, Jennifer
Neuman212-835-8500nxst@jcir.com
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