TEGNA to Acquire KFMB San Diego from Midwest

RADIO ONLINE | Monday, December 18, 2017

TEGNA

TEGNA Inc. has agreed to acquire 50kW News/Talk KFMB-AM (760) and 30kW Adult Rock KFMB-FM (100.7) in San Diego, along with CBS affiliate KFMB-TV and CW affiliate KFMB-D2, from Midwest Television Inc. for $325 million in cash. The deal is expected to close in the first quarter of 2018. TEGNA is primarily a television operator with 46 television stations in 38 markets. KFMB-TV and KFMB-D2 share studio facilities in the Kearny Mesa section of San Diego with KFMB-AM and KFMB-FM.

"This is a marriage of two great broadcasting cultures. We have long admired our dedicated colleagues in San Diego and look forward to continuing the stations' high-quality journalism, editorial independence and commitment to their local community," said TEGNA President/CEO Dave Lougee. "We have a proven ability to be a strategic and disciplined consolidator with a track record of acquiring profitable businesses at an attractive, accretive valuation. Looking ahead, we will continue to evaluate additional investments and select transactions to build on our growth and success with a focus on creating shareholder value."

Midwest Television President and owner Elisabeth Kimmel said, "This transaction is a testament to the outstanding value our employees have created serving the San Diego community. Having owned these properties for over 55 years, our family believed it imperative to find an excellent steward for television and radio stations that the community has embraced as part of the fabric of San Diego. We have found such a partner in TEGNA, an innovative media company that shares our commitment to the highest levels of journalistic integrity and serving the greater good of the community."

The transaction, structured as an asset purchase, represents a purchase price multiple of 6.6 times average expected 2017/2018 EBITDA, including expected run rate synergies and tax benefits. TEGNA expects the transaction to be accretive to EPS by a few cents within the first 12 months after close, and immediately accretive to free cash flow.