Nexstar to Acquire Media General for $4.6 Billion

IRVING/RICHMOND: Nexstar Broadcasting Group has entered into a definitive merger agreement to acquire all outstanding shares of Media General for $4.6 billion.

The transaction is not subject to any financing condition, and Nexstar has received committed financing for the transaction totaling $4.7 billion from BofA Merrill Lynch, Credit Suisse and Deutsche Bank. The move follows the termination of the proposed merger transaction between Meredith Corporation and Media General. Pursuant to the Meredith-Media General merger agreement, Meredith will receive the $60 million termination fee. In addition, Meredith will get an opportunity to negotiate for the purchase of certain broadcast and digital assets currently owned by Media General.

The new Nexstar Media Group will be one of the U.S.’s leading providers of local news, entertainment, sports, lifestyle and network programming and content through its broadcast and digital media platform with annual revenue in excess of $2.3 billion. Its bouquet will span 171 television stations in 100 markets and a diverse and growing digital media operation.

Perry Sook, the chairman, president and CEO of Nexstar, commented, “The acquisition of Media General’s broadcasting and digital media assets represent a transformational growth opportunity for Nexstar and is strategically and financially compelling. The transaction increases Nexstar’s broadcast portfolio by approximately two thirds with very limited overlap with our existing properties, more than doubles our audience reach, provides entrée to 15 new top-50 DMAs and offers synergies related to the increased scale of the combined digital media operations.

“Financially, the transaction is expected to more than double our revenue and adjusted EBITDA and result in over $500 million of annual free cash flow which we intend to allocate to leverage reduction, additional strategic growth investments and the return of capital to shareholders. Importantly, Nexstar Media Group’s annual free cash flow per share is expected to exceed $10.50 per year over the 2015-16 period, marking an approximate 34 percent increase in Nexstar’s pro-forma 2015-16 free cash flow per share from Nexstar’s current pro-forma 2015-16 free cash flow per share of $7.85.

“We intend to implement our proven strategy of focusing on local programming and effective digital media marketing solutions across the assets being acquired and will marry best of breed practices from our existing operations with those from Media General. Led by a proven broadcast and digital media management team with a long-term record of operating execution, M&A integration, delivering strong compound annual growth in free cash flow and creating shareholder value, we are confident that the new Nexstar Media Group will be strongly positioned for consistent long-term success.”

Vincent L. Sadusky, the president and CEO of Media General, added, “We are pleased to reach this agreement with Nexstar, which provides Media General shareholders with substantial and immediate value, as well as the opportunity to participate in the significant upside potential of the combined company. Together with Nexstar, we can deliver a more comprehensive, integrated and competitive offering across all markets for the benefit of our advertisers and brands. I am thankful for the hard work and dedication of our talented employees, and I’m confident they will continue to make many valuable contributions as part of a larger and stronger organization. I look forward to working closely with the Nexstar team to bring our companies together to realize the power of this compelling combination and ensure a smooth transition.”