Broadcast station M&A volume reached $681.2 million in the second quarter, largely on deals stemming from regulatory limits imposed on Nexstar Broadcasting Group in its $4.6 billion acquisition of Media General, according to SNL Kagan research.
Kagan said in a recent report that total broadcast M&A, including radio station sales, reached $728.9 million in the period. Of that total, TV deals accounted for about $681.2 million, with 80% of those TV sales coming from spinoffs resulting from the Nexstar/Media General deal.
As part of its January deal to acquire Media General, Nexstar agreed to sell 12 stations in 10 markets to five different buyers. The largest of those deals – and the top TV deal of the period – was the $270 million sale of KWQC (NBC / Davenport, Iowa) and WBAY (ABC / Green Bay, Wis.) to Gray Television. The other spinoffs involved Graham Holdings (two stations for $120 million); MSouth Equity Partners LP and Heartland Media LLC (five stations for $115 million); Bayou City Broadcasting Lafayette (one full- and one low-power station for $40 million); and Marquee Broadcasting (one station for $350,000).
Six of the stations sold by Nexstar are technically still owned by Media General, but Nexstar made the announcement as the seller, with the transactions expected to close soon after approval and closing of its Media General acquisition. Nexstar reported an average 11.1 times trailing seller’s cash flow multiple for the spinoffs. SNL Kagan estimates that translates to a forward (2016/17) multiple of 10 times cash flow.
The second quarter's largest TV deal not involving Nexstar was the sale of three stations by Calkins Media to Raycom Media and American Spirit Media for $82 million.
TV station deal volume in the first half of 2016 totaled $5.29 billion with 96 full-power and 38 low-power stations sold. While the vast majority of the TV station deal volume stems from the Nexstar and Media General merger and its spinoffs, a total of $117.6 million (15 full-power and 35 low-power stations) came from deals activity not involving either one of the merger parties. Kagan said in its report.
