Nexstar Broadcasting Group, Inc. (Nasdaq: NXST) announced today that its wholly-owned indirect subsidiary, Nexstar Broadcasting, Inc., has entered into a definitive agreement to acquire the assets of KSEE(TV), the NBC affiliate serving the Fresno, California market, from Granite Broadcasting Corporation for $26.5 million in a transaction that is expected to be immediately accretive to Nexstar.
Under the terms of the agreement, Nexstar acquired all of KSEE(TV)’s non-FCC license assets from Granite for $20 million and will file a license transfer application with the FCC. Upon FCC approval of the license transfer, Nexstar will pay Granite the remaining $6.5 million of the total purchase price. Nexstar has entered into a Time Brokerage Agreement with Granite whereby it will operate KSEE(TV) immediately, while awaiting FCC approval for the closing of the transaction.
Commenting on the agreement, Nexstar Broadcasting Group President and Chief Executive Officer, Perry A. Sook said, “With our agreement last November to acquire KGPE-TV, the CBS affiliate serving the Fresno, California market, we are delighted to announce the acquisition of the market’s NBC affiliate, KSEE. KSEE squarely meets our acquisition criteria as it further expands our revenue, scale and operating base, creates another duopoly market for Nexstar and is financially accretive.”
The proposed transaction will result in Nexstar operating one station and/or providing sales and other services to another station in 26 of the 41 markets where it operates (which assumes the completion of the acquisitions of five stations from Newport Television, LLC and Smith Broadcasting both of which were announced in November 2012). In addition, it will expand to 72 the number of stations and related digital signals that Nexstar either owns or provides sales and other services.
Mr. Sook added, “Consistent with Nexstar’s other recently announced acquisitions, the purchase price for KSEE is approximately 5.0 times the station’s average 2012/2013 pro-forma cash flow. Under Nexstar’s ownership, the station will realize additional retransmission revenues as well as synergistic operating improvements, and as a result, on a pro-forma basis the acquisition will be immediately accretive to results.”