CBS Radio Merges With Entercom, David Field To Lead Combined Company

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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.