Upated from 4:31 p.m. ET to include Standard & Poor's ratings action. NEW YORK ( TheStreet) -- Newspaper conglomerate Gannett ( GCI) is buying Belo Corp. ( BLC), a broadcast television-station operator, in a $1.5 billion deal that promises to almost double the company's TV revenue. Gannett will acquire Belo for $13.75 per share in cash and assume $715 million in debt. A clear financial rationale presented by Gannett and a strong investor reaction that put shares at five-year highs on Thursday indicates the deal may be a turning point for the 90-year old publisher. Shares of McLean, Virginia-based Gannett soared 34% Thursday to close at $26.60. Belo shares closed up over 28% to $13.77, two cents above Gannett's offer price. With Belo, Gannett will become the country's fourth-largest owner of affiliate-TV stations, reaching nearly one-third of U.S. households. Those businesses will help diversify Gannett from its lower-profit margin newspaper and online media businesses. Overall, Gannett will increase its broadcast portfolio from 23 to 43 stations and will take over as the lead affiliate for CBS ( CBS) stations, the fourth largest affiliate of ABC stations and it will add to its top standing among NBC affiliates. Thursday's merger will generate about $175 million in annual synergy within three years of the deal's close, Gannett said in a statement. The merger is also expected to add to non-GAAP earnings per share by approximately $0.50 within the first 12 months and significantly increase Gannett's free cash flow. While Gannett's acquisition values Belo at a multiple of 9.4 times earnings before interest, taxes, depreciation and amortization (EBITDA), the deal comes at just a 5.4x EBITDA multiple when assuming the projected synergy. While Gannett continues to earn the bulk of its over $5 billion in annual revenue from newspaper and publishing businesses such as USA Today, the acquisition of Belo may more than double its broadcast business to over $2 billion in annual sales. "We have been successfully transforming Gannett into a diversified multi-media company with broadcast, digital and publishing components across high-growth markets nationwide, and this is another important step in the process," Gracia Martore, Chief Executive Officer of Gannett, said in a statement. "This is an outstanding and financially compelling transaction for our shareholders," Dunia A. Shive, Belo's CEO said in a statement. In 2008, Dallas-based Belo split its broadcast media business from A.H. Belo ( AHC), which publishes newspapers such as the Dallas Morning News and Providence Journal.