Tribune Co. agreed to buy all of Local TV Holdings LLC’s 19 television stations in 16 markets for $2.73 billion in cash, becoming the largest U.S. commercial TV station owner and further lessening its reliance on newspapers.
The acquisition of Local TV, principally owned Oak Hill Capital Partners, will almost double the number of Tribune’s stations to 42, with presence in cities from New York to Los Angeles and Miami to Seattle, according to a statement today.
The scale will help maximize national and local advertising opportunities, Chicago-based Tribune said in the statement. The deal also further focuses the publisher of the Los Angeles Times and Chicago Tribune on its television assets. Tribune, which named TV industry veteran Peter Liguori as chief executive officer in January after emerging from bankruptcy, has held talks to sell its newspapers this year, according to people familiar with the process.
The purchase accelerates consolidation in an industry that had already seen the fastest takeover pace in six years as of last month. U.S. TV and broadcast deals totaled $3.2 billion in the quarter through June 19, almost double any period since 2007, according to data compiled by Bloomberg.
Among the latest deals, Sinclair Broadcast Group Inc., based in Hunt Valley, Maryland, agreed to buy four outlets from Titan Broadcast Management for $115.4 million a month ago. That accord was followed on June 6 by the $860 million merger of Media General Inc., backed by Warren Buffett and Mario Gabelli, with New Young Broadcasting Holding Co.
Tribune -- whose largest investors now include Oaktree Capital Management LP, JPMorgan Chase & Co and Angelo, Gordon & Co. -- anticipates the Local TV Holdings purchase will generate more than $100 million in annual run-rate savings within five years after closing the deal.
The company has received committed financing of as much as $4.1 billion from JPMorgan, Bank of America Corp., Citigroup Inc., Deutsche Bank AG and Credit Suisse Group AG. It includes a new $300 million revolving credit facility and the capacity to allow Tribune to refinance its existing debt, according to the statement. Tribune said it will fund the transaction through a combination of debt and cash.