Home Login RADIO ONLINE RSS Facebook
Advertisement

Entercom, CBS Radio Announce Proposed Merger


Entercom Communications and CBS Corp. have entered into an agreement by which Entercom will combine with CBS Radio in a tax-free merger. CBS had been expected to spin its radio group off with an IPO, but instead opting for a merger that will create a huge radio platform with a nationwide footprint of 244 stations, including 23 of the top 25 U.S. markets, as well as robust digital capabilities and a growing events platform.

"This agreement is great for shareholders and achieves our previously stated objectives by separating our radio business in the best possible way," said Leslie Moonves, Chairman and Chief Executive Officer, CBS Corporation. "Entercom is a superbly run company, and together with CBS Radio's powerful brands and remarkable people, we are creating an organization that will be even better positioned to succeed in this rapidly evolving media landscape."

David J. Field, President and CEO of Entercom, who will lead the combined company, said, "These two great companies, with their impressive histories, complementary assets, and premier content and brands, are a perfect strategic and cultural fit, enabling us to deliver local connection on a national scale and drive accelerated growth. We look forward to welcoming our talented new colleagues at CBS Radio, and we have the utmost respect for their significant contributions to the industry."

Field added, "Radio reaches more Americans than any other medium, and offers advertisers outstanding ROI and local activation. This transformational transaction creates scale-driven efficiencies and opportunities to compete more effectively with other media to better serve our listeners and our advertisers. The combination of a compelling strategic fit, an excellent balance sheet, and robust free cash flow generation, position us to create significant shareholder value for our investors."

Andre Fernandez, who will continue as President and CEO of CBS Radio through the closing of the transaction, said, "I couldn't be more proud of the CBS Radio team and all of the exciting breaking news, live events, and business initiatives happening every day across the country. Today marks the beginning of a new chapter for us as we join with an organization with an equally deep tradition in radio broadcasting. The opportunities for the new company are enormous-thanks to our combined collection of industry-leading stations and brands."

Transaction Details

The combined companies' pro forma revenue on a trailing 12 months basis was approximately $1.7 billion-which would make it the second-largest radio station owner in the U.S.-and adjusted EBITDA was nearly $500 million, including expected transaction synergies. With pro forma leverage of approximately 4.0x net debt/Adjusted EBITDA, the merger will create a well-capitalized company with a market cap of over $2 billion, a strong balance sheet, significant free cash flow generation, and an attractive dividend, positioned to drive shareholder value.

The combination of CBS Corporation's radio business with Entercom will be effected through a "Reverse Morris Trust" transaction, which is expected to be tax-free to CBS and its shareholders. As part of the transaction, CBS shareholders will have the opportunity to exchange all, some, or none of their CBS shares for CBS Radio shares. Immediately following the completion of this exchange offer, CBS Radio will merge with an Entercom subsidiary, with the new CBS Radio shareholders receiving Entercom shares in exchange for their CBS Radio shares in the transaction. After completion of the merger, CBS Radio shareholders will receive approximately 105 million Entercom shares, or 72 percent of all outstanding shares of the combined company on a fully diluted basis. Existing Entercom shareholders will own 28 percent of the combined company on a fully diluted basis.

The transaction is subject to approval by Entercom shareholders. Entercom Chairman Joseph M. Field, a controlling shareholder of Entercom, has agreed to vote in favor of the transaction. The transaction is expected to close during the second half of 2017, subject to certain regulatory approvals and other customary closing conditions.

Governance & Structure

The combined company will be known as Entercom and will be headquartered in Philadelphia, with a significant ongoing presence in New York. Upon closing, the company's Board of Directors will consist of nine members: five current Entercom directors, including David Field as Chairman of the Board, and four directors nominated by CBS Radio.

Morgan Stanley & Co. LLC and Centerview Partners are serving as financial advisors, and Latham & Watkins LLP is serving as legal counsel to Entercom. Goldman, Sachs & Co. is serving as financial advisor, and Wachtell, Lipton, Rosen & Katz is serving as legal counsel to CBS Corporation.

Advertisement

Latest Radio Stories

Zoellner Media Group to Acquire CMG Tulsa Radio Stations
Zoellner Media Group
Zoellner Media Group
Tulsa-based Zoellner Media Group has entered into a definitive agreement to purchase all of Cox Media Group's radio outlets in Tulsa, marking the company's first major foray into local broadcasting. Terms were not immediately disclosed. Upon completion of the transaction, Zoellner Media Group will acquire More

SBS Reports 71% Surge in Adjusted OIBDA for 2024
Spanish Broadcasting System (SBS)
Spanish Broadcasting System (SBS)
Spanish Broadcasting System (SBS) has announced strong financial results for the fourth quarter and full year ended December 31, 2024, highlighted by a 71% increase in Adjusted Operating Income Before Depreciation and Amortization (OIBDA), which reached $40.4 million compared to More

AM/FM Radio Streaming Tops Spotify, Pandora in New Study
Cumulus Media and Westwood One
Cumulus Media and Westwood One
A new analysis from Edison Research's Q1 2025 "Share of Ear" study reveals significant gains for AM/FM radio streaming, which now surpasses both Spotify and Pandora in ad-supported audio share. The findings, published by Cumulus Media | Westwood One's Audio Active Group, highlight five key takeaways that More
Advertisement

Broadcasters Foundation Sets June 18 for NYC Media Mixer
Broadcasters Foundation of America
Broadcasters Foundation of America
The Broadcasters Foundation of America (BFOA) has announced the next installment of its popular Media Mixer series, set for Wednesday, June 18, from 5:30 to 7:30pm ET at iHeartMedia's New York City studios at 125 West 55th Street, 12th Floor. The event, created to connect More

MacDonald Saginaw Names Bob Lawrence as MM
Bob Lawrence
Bob Lawrence
Bob Lawrence is appointed Market Manager for MacDonald Broadcasting's radio cluster and digital properties in Saginaw, MI. He most recently served as General Manager and Market Manager for Seven Mountains Media's cluster in Parkersburg-Marietta. Lawrence joined Seven Mountains Media in May 2024 after serving More

Kim Fitz Joins Christian FM Media's TCM Network
Kim Fitz
Kim Fitz
Christian FM Media Group has announced the addition of veteran Christian radio host Kim Fitz to its syndicated "Today's Christian Music" network. Fitz will anchor the midday slot across the network's 167 affiliated stations, bringing her signature style of warmth, clarity, and uplifting content to audiences More

Return to Menu

Advertisement

Subscribe to our Newsletter
Radio news and headlines delivered right to your e-mail box -- and it's free.

Advertisement

Advertisement