Irving, Texas-based Nexstar Broadcasting Group Inc. (Nasdaq: NXST) said it had completed the previously announced purchase of the assets of WJMN-TV, the CBS affiliate serving the Marquette market in the Upper Peninsula.
Also purchased was WFRV-TV, the CBS affiliate in Green Bay, Wis.
The WFRV-TV and WJMN-TV stations were purchased from an affiliate of Liberty Media Corp. for $20 million and are expected to be immediately accretive to Nexstar’s operating results.
Nexstar now owns, operates, programs or provides sales and other services to 13 CBS affiliates and a total of 65 television stations and related digital signals in 36 markets in 16 states, and reaches approximately 13.5 million television households.
“The acquisition of WFRV and WJMN brings immediate strategic and financial benefits to Nexstar as it expands and diversifies our station portfolio, is de-leveraging on a debt-to-cash-flow basis and marks our entrée to Wisconsin and Michigan which complement our existing Midwest operations,” said Nexstar president and CEO Perry A. Sook. “Under Nexstar’s ownership both stations will realize additional retransmission revenues as well as synergistic operating improvements. As such, the purchase price for the two stations is less than five times the average 2010-11 pro-forma projected cash flow. On a pro-forma basis the acquisition is immediately accretive and we expect WFRV and WJMN to contribute to our results for the second half of 2011.”
Sook added, “In addition to CBS’ strong prime-time offerings, we are committed to bringing Green Bay and Marquette viewers the best local news and locally produced programming and last week, WFRV, Channel 5, launched the Green Bay area’s first high-definition newscast. With both WFRV and WJMN broadcasting in HD, we have a strong platform for marketing solutions for local and national advertisers which we plan to expand with the launch of Nexstar’s e-Media and mobile offerings through our proven Community Portal model.”
Wisconsin native Joe Denk was named to lead the stations. He was born in Madison, raised in Milwaukee and graduated from the University of Wisconsin, Platteville. Since June 2008, Denk has served as vice president and general manager of the Nexstar-owned Fox WQRF-TV and Mission Broadcasting-owned ABC affiliate WTVO-TV and community portal Mystateline.com, all of which serve the Rockford, Ill. market.
According to Nielsen Media’s 2010-2011 Local Market Estimates, the Green Bay and Marquette DMA’s are ranked as the 71st and 179th largest television markets in the country, respectively.
Nexstar’s purchase consideration for WFRV-TV and WJMN-TV included $17.5 million of cash, which it financed through borrowings under its senior credit facility, and the issuance to an affiliate of Liberty Media Corporation of 334,292 Nexstar Broadcasting Group Class A shares valued at $2.5 million. The shares issued as partial consideration in the transaction are unregistered, carry piggyback registration rights and are subject to a six month lock up period.