Beasley Broadcast Group Enters Into Definitive Agreement to Acquire WDMK-FM Detroit for $13.5 Million in Accretive Transactio...
June 10 2019 - 2:35PM
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 WDMK-FM and three translators in Detroit, Michigan from
Urban One (NASDAQ: UONEK) (“Urban One”) for $13.5 million in cash.
Excluding one-time transaction costs, the acquisition of WDMK-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.
Beasley’s acquisition of WDMK-FM is
complementary to the Company’s three existing radio stations and
digital operations in the Detroit market, the thirteenth largest
designated marketing area in the country, and reflects the
Company’s long-term focus on premium local programming and
content.
Commenting on the proposed transaction, Caroline
Beasley, Chief Executive Officer, said, “The accretive acquisition
of WDMK-FM significantly enhances our revenue and competitive
position in Detroit. Detroit is undergoing an exciting renaissance
as a result of billions of dollars of new investments in the city’s
residential, commercial, entertainment and cultural centers, all of
which are driving new residents, businesses, tourists, employment
and economic activity.”
“We entered the Detroit market in late 2016 and
have consistently improved the operating results of the three
stations we acquired, and we believe the proposed transaction is a
strategically and financially compelling growth opportunity for our
shareholders. The addition of WDMK-FM will mark further
progress toward our goal of capturing 30 percent revenue share in
each of our markets while delivering valuable synergies and the
potential for SOI margin improvement.”
“Consistent with Beasley’s disciplined approach
to growing our platform, the acquisition of WDMK-FM is expected to
be immediately accretive to free cash flow, excluding one-time
transaction costs, and with our strong balance sheet, we will
continue to have the financial flexibility to make additional
return-focused growth investments, while further reducing leverage
and returning capital to shareholders.”
“We look forward to realizing the strategic
benefits of the WDMK-FM transaction in 2020 as we continue to
advance our initiatives focused on leveraging our premium local
programming and brands, while aggressively rolling out our digital
offerings and distribution capabilities to reinforce and grow
Beasley’s leadership position across all audio platforms in our
markets. This approach will enable us to deliver great local
content to listeners while creating an even stronger marketing
platform for local businesses.”
The transaction, expected to close during fourth
quarter of 2019, is subject to Federal Communications Commission
approval and other customary closing conditions. The proposed
transaction was brokered by Michael Bergner.
About Beasley Broadcast
GroupCelebrating its 58th 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.
Beasley Broadcast Group owns and operates 64 stations (46 FM and 18
AM) in 15 large- and mid-size markets in the United States.
Approximately 19 million consumers listen to Beasley radio stations
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 develop compelling
and differentiated digital content, products and services; audience
acceptance of our content, particularly our radio programs; our
ability to respond to changes in technology, standards and services
that affect the radio industry; our dependence on federally issued
licenses subject to extensive federal regulation; actions by the
FCC or new legislation affecting the radio industry; our dependence
on selected market clusters of radio stations for a material
portion of our net revenue; credit risk on our accounts receivable;
the risk that our FCC broadcasting licenses and/or goodwill could
become impaired; our substantial debt levels and the potential
effect of restrictive debt covenants on our operational flexibility
and ability to pay dividends; the failure or destruction of the
internet, satellite systems and transmitter facilities that we
depend upon to distribute our programming; disruptions or security
breaches of our information technology infrastructure; 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; our ability to integrate acquired businesses and achieve
fully the strategic and financial objectives related thereto and
their impact on our financial condition and results of operations;
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
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 |
Chief Communications Officer |
JCR |
Beasley Broadcast Group, Inc. |
212-835-8500 or bbgi@jcir.com |
239-659-7332 |
|
heidi.raphael@bbgi.com |
|
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