Gray Television Inc., headquartered in Atlanta, acquires the Local Media Group of Meredith Corp., 17 television stations, including KVVU, Fox 5, in Las Vegas.
The $ 2.7 billion cash deal was announced early Monday and is expected to close in the fourth quarter.
The transaction has been approved by the boards of Meredith and Gray. Meredith shareholders are expected to look into the deal in the fall. The Gray shareholders do not have to agree to this.
KVVU Vice President and General Manager Michael Korr sent a statement sent by email.
“FOX 5th Local. Las Vegas. is a proud member of the Las Vegas community and will continue to provide great coverage, local insights and strong partnerships with advertisers, “said Korr.” We are excited about the future of Gray and expect great things to come with its extra size and broadcast ability.
Korr didn’t comment on whether the new ownership would affect on-air personalities, but a Meredith spokeswoman said no staffing changes are being considered.
The transaction came after Des Moines, Iowa-based Meredith spun off its Local Media Group from its National Media Group and its numerous print publications.
As part of the transaction, Meredith will acquire the National Media Group as an independent, publicly traded company, retaining the name Meredith Corp. outsourced to the shareholders.
Gray believes the Meredith transaction will significantly increase free cash flow per share. To date, Gray has estimated synergies of $ 55 million annualized for the first full calendar year after closing on an annual basis.
The Las Vegas station is one of the smallest of the 17 involved in the transaction.
The largest stop on the deal is WGCL, a CBS subsidiary in Atlanta with independent WPCH in the designated # 7 market area. Las Vegas is the # 40 designated market area.
“The broadcaster portfolios, corporate cultures, and Gray and Meredith commitment to localization are highly complementary,” said Hilton Howell, executive chairman and CEO of Gray. “We are very excited to acquire Meredith’s excellent television channels and look forward to welcoming its employees to the Gray family. Building on our successes in 2020 and only in the first few months of 2021, Gray Television clearly has a stronger and better future than ever! “
Meredith will continue to be headquartered in Iowa and organize itself into the Digital and Magazine segments for financial reporting purposes. The senior executive team will remain in place, said chairman and chief executive officer Tom Harty.
“With this transaction, we can focus more on the potential of our brands and assets,” said Harty.
The company will use the proceeds from the sale to clear corporate debt, pay transaction-related costs, and pay $ 14.50 per share to Meredith shareholders who will retain a 1-to-1 stake in the company after the sale.
Federal government approval is required, including approval from the Federal Communications Commission.
The company’s magazines focus on increasingly popular celebrity and entertainment news, home and home, food, style, health, fitness, and parenting – topics that have received increased interest during the coronavirus pandemic, and the company said fundamental changes These trends in consumer behavior point to a continuation to follow.
The company’s online digital business is growing, and its advertising accounts for more than half of the company’s expected advertising revenue. Digital advertising revenue rose 21 percent for Meredith in the third quarter of 2021, outperforming magazine advertising revenue for two consecutive quarters.
A Meredith spokeswoman said the company had more than 5,200 employees, including around 850 at its Des Moines headquarters. When the contract is signed, Gray will employ around 1,600 people.
Meredith acquired Time Inc. in November 2017 for $ 2.8 billion including Time’s debt. The company has since sold several of the magazine titles it acquired, including Time, Fortune, Sports Illustrated, and Money.
Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter. The Associated Press contributed to this report.
