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February 2, 2017 at
8:37 AM (PT)
ENTERCOM
COMMUNICATIONS and CBS CORPORATION have entered into an agreement by which
ENTERCOM will combine with CBS RADIO in a tax-free merger. The combined company
will have a nationwide footprint of 244 stations, including 23 of the Top
25 Markets.
“This agreement is great for shareholders and
achieves our previously stated objectives by separating our radio business in
the best possible way,” said CBS CORP. Chairman/CEO LESLIE MOONVES. “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.”
ENTERCOM Pres./CEO DAVID J. FIELD, 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 continued, “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
Pres./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 company with a market cap of over $2 billion.
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