Discovery Buying Scripps for $14.6 Billion

Discovery Communications has entered into a deal to acquire Scripps Networks Interactive in a cash-and-stock transaction valued at $14.6 billion.

The transaction is expected to close by early 2018. This purchase price implies a total transaction value of $14.6 billion, including the assumption of Scripps’ net debt of approximately $2.7 billion.

The combined company will produce approximately 8,000 hours of original programming annually, be home to approximately 300,000 hours of library content, and will generate a combined 7 billion short-form video streams monthly, demonstrating its commitment to delivering content as a top short-form provider. Together, Discovery and Scripps will have nearly 20 percent share of ad-supported pay-TV audiences in the U.S.

Kenneth Lowe, the chairman, president and CEO of Scripps Networks Interactive, is expected to join Discovery’s board of directors following the close of the transaction.

“This is an exciting new chapter for Discovery. Scripps is one of the best-run media companies in the world with terrific assets, strong brands and popular talent and formats,” said David Zaslav, the president and CEO of Discovery Communications. “Our business is about great storytelling, authentic characters and passionate super fans. We believe that by coming together with Scripps, we will create a stronger, more flexible and more dynamic media company with a global content engine that can be fully optimized and monetized across our combined networks, products and services in every country around the world.”

“Through the passion and dedication of our incredible employees, and with the support of the Scripps family, we have built a lifestyle content company that touches the lives of consumers every single day,” said Lowe. “This agreement with Discovery presents an unmatched opportunity for Scripps to grow its leading lifestyle brands across the world and on new and emerging channels, including short-form, direct-to-consumer and streaming platforms.”

News of the acquisition comes as Discovery Communications reported its Q2 financial results, which saw revenues of $1.745 billion, up 2 percent compared to the prior year. There was 2 percent growth at U.S. networks and 3 percent growth at international networks, partially offset by a 4 percent decline in education and other. Second quarter net income available to Discovery Communications decreased 8 percent to $374 million, as improved operating results and lower restructuring charges were more than offset by currency-related transactional losses.

Scripps reported second quarter preliminary results through income from operations before income taxes. Consolidated operating revenues were $925 million, an increase of 3.6 percent over the prior year period. Advertising revenues were $663 million, up 2.5 percent, and distribution revenues were $239.7 million, up 7.3 percent. Consolidated income from operations before income taxes in the quarter was $400.8 million, an increase of 20.8 percent on the comparable period.