Beasley Broadcast Group Enters Into Definitive Agreement to Acquire WXTU-FM in Philadelphia, PA for $38 Million
July 19 2018 - 9:00AM
Beasley Broadcast Group, Inc. (Nasdaq:BBGI) (“Beasley” or “the
Company”), a large- and mid-size market radio broadcaster,
announced today that it entered into a definitive agreement to
acquire WXTU-FM in Philadelphia, PA from Entercom Communications
Corp. (NYSE:ETM) (“Entercom”) for $38.0 million in cash. Excluding
one-time transaction costs, the acquisition of WXTU-FM is expected
to be immediately accretive to Beasley’s free cash flow without
materially altering the Company’s leverage. Beasley intends
to fund the acquisition through borrowings under its credit
facility and cash generated from operations.
The acquisition of WXTU-FM highlights Beasley’s
focus on premium local programming and content and is complementary
to the Company’s six other radio stations and digital operations in
the Philadelphia market, the ninth largest designated marketing
area in the country.
Commenting on the proposed transaction, Caroline
Beasley, Chief Executive Officer said, “Our acquisition of WXTU-FM
represents a strategically and financially compelling growth
opportunity for our shareholders and further enhances our revenue
and competitive position with a strong cluster of five FM and two
AM stations in a key, top-ten market. Importantly, the addition of
WXTU-FM is consistent with Beasley’s disciplined approach to
growing our platform by executing accretive transactions that
deliver valuable synergies and the potential for SOI margin
improvement, all with a limited impact to our leverage.
“As the former owner of WXTU-FM, Beasley
originally launched the station’s country music format in 1983
against the advice of a number of industry pundits who believed it
wouldn’t succeed in the Philadelphia market. Instead, the station
thrived and resulted in our successful exchange of WXTU-FM in 2014,
as part of a larger asset exchange agreement with CBS Radio. Today,
WXTU-FM remains one of the best and most listened-to country music
stations in America. We are proud of this heritage and confident in
our ability to continue the growth and success of WXTU-FM as part
of the Beasley family of stations.
“Throughout Beasley Broadcast Group’s 56 year
history, we have actively managed our station portfolio with the
goal of serving the communities where we operate with the best
local programming and brands, diversifying our operations, managing
risk and improving financial results. This focus continues to be an
essential component of our long-term growth and success. We look
forward to realizing the strategic benefits of this transaction in
the coming quarters as we leverage our legacy ownership and
knowledge of the Philadelphia market to deliver great local
programming to listeners while creating an even stronger marketing
platform for local area businesses.”
Beasley will begin operating the station under a
local marketing agreement on July 23, 2018.
The transaction, expected to close during the late third quarter or
fourth quarter of 2018, is subject to Federal Communications
Commission approval and other customary closing conditions.
About Beasley Broadcast
GroupCelebrating its 57th anniversary this year, Beasley
Broadcast Group, Inc., (www.bbgi.com) was founded in 1961 by George
G. Beasley who remains the Company’s Chairman of the Board.
Following the acquisition of WXTU, Beasley Broadcast Group will own
and operate 64 stations (46 FM and 18 AM) in 15 large- and mid-size
markets in the United States. Beasley radio stations reach
over 19.0 million unique consumers weekly over-the-air, online and
on smartphones and tablets, and millions regularly engage with the
Company’s brands and personalities through digital platforms such
as Facebook, Twitter, text, apps and email. For more
information, please visit www.bbgi.com.
Note Regarding Forward-Looking
Statements:
Statements in this release that are
“forward-looking statements” are based upon current expectations
and assumptions, and involve certain risks and uncertainties within
the meaning of the U.S. Private Securities Litigation Reform Act of
1995. Words or expressions such as “believe,” “intends,”
“expects,” “expected,” “anticipates” or variations of such words
and similar expressions are intended to identify such
forward-looking statements. Forward-looking statements by
their nature address matters that are, to different degrees,
uncertain, such as statements about expected impact of the
acquisition. Key risks are described in our reports filed with the
SEC including in our Annual Report on Form 10-K and Quarterly
Reports on Form 10-Q. Readers should note that
forward-looking statements are subject to change and to inherent
risks and uncertainties and may be impacted by several factors,
including, but not limited to: our ability to complete the
acquisition and achieve the expected benefits of the acquisition;
external economic forces that could have a material adverse impact
on our advertising revenues and results of operations; the ability
of our radio stations to compete effectively in their respective
markets for advertising revenues; our ability to respond to changes
in technology, standards and services that affect the radio
industry; audience acceptance of our content, particularly our
radio programs; our substantial debt levels and the potential
effect of restrictive debt covenants on our operational flexibility
and ability to pay dividends; our dependence on federally issued
licenses subject to extensive federal regulation; the risk that our
FCC broadcasting licenses and/or goodwill could become impaired;
the failure or destruction of the internet, satellite systems and
transmitter facilities that we depend upon to distribute
programming; disruptions or security breaches of our information
technology infrastructure; actions by the FCC or new legislation
affecting the radio industry; the loss of key personnel; the fact
that we are controlled by the Beasley family, which creates
difficulties for any attempt to gain control of us; the effect of
future sales of Class A common stock by the Beasley family or the
former stockholders of Greater Media; and other economic, business,
competitive, and regulatory factors affecting our
businesses.
Our actual performance and results could differ
materially because of these factors and other factors discussed in
the “Management’s Discussion and Analysis of Results of Operations
and Financial Condition” in our SEC filings, including but not
limited to our Annual Report on Form 10-K or Quarterly Reports on
Form 10-Q, copies of which can be obtained from the SEC,
www.sec.gov, or our website, www.bbgi.com. All information in
this release is as of the date of this press release, and we
undertake no obligation to update the information contained herein
to actual results or changes to our expectations.
CONTACT: |
|
Heidi
Raphael |
Joseph Jaffoni,
Jennifer Neuman |
Vice President of
Corporate Communications |
JCR |
Beasley Broadcast
Group, Inc. |
212-835-8500 or
bbgi@jcir.com |
239-659-7332 |
|
heidi.raphael@bbgi.com |
|
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