Plus Pages

Wednesday, July 15, 2015

Entercom Moves Into L-A, Gets DOJ Okay For LFM Acquisition

Entercom Communications Corp. has announced:
  • An agreement with Bonneville International Corporation to exchange four stations in Denver for KSWD-FM (The Sound) in Los Angeles
  • Time brokerage agreements that will allow Bonneville and Entercom to operate the exchanged stations immediately upon the closing of the Lincoln Financial Media acquisition
  • A settlement with the Antitrust Division of the U.S. Department of Justice related to the Company’s previously announced acquisition of LFM
  • An expectation that the closing of the LFM acquisition and commencement of the Bonneville-Entercom TBAs will take place within a few business days
Entercom has entered into an exchange agreement with Bonneville under which Entercom will exchange four stations in Denver for Classic Rock station The Sound in Los Angeles and $5 million in additional consideration. The stations Entercom will exchange with Bonneville are: KOSI-FM, KYGO-FM, KKFN-FM and KEPN-AM. Entercom owns KOSI-FM, while the remaining stations are being acquired through the acquisition of LFM.

Entercom and Bonneville will begin operating the exchanged stations under TBAs once the LFM transaction is completed. Closing of the Bonneville-Entercom exchange is subject to FCC approval and other customary closing conditions. Entercom expects the Bonneville transaction to close by the fourth quarter of this year.

Entercom also announced that it has reached a settlement with the DOJ regarding the Company’s acquisition of LFM which was announced in December 2014. The DOJ initiated its Hart Scott Rodino review of the acquisition with a focus on the impact of the transaction on concentration in the Denver radio market. As a result of the exchange agreement with Bonneville, the DOJ has agreed to approve the Company’s acquisition of LFM. The Company has received FCC approval for the LFM acquisition and will close the transaction after DOJ terminates the Hart-Scott-Rodino waiting period.


Closing of the LFM acquisition and the commencement of the related Bonneville-Entercom time brokerage agreements are expected to take place within a few business days.


Commenting on the transactions, Entercom President and Chief Executive Officer David J. Field stated:
“We are delighted to be moving forward on our long-delayed acquisition of Lincoln Financial Media and adding their terrific brands, markets and people to our organization 
We are also very excited to be acquiring The Sound, the fastest growing radio station in Los Angeles, through our station exchange with Bonneville. Adding Los Angeles, Miami, Atlanta, and San Diego to our footprint will meaningfully enhance our ability to serve our listeners, customers, employees and shareholders. 
This is a great day for Entercom that will enhance our competitive position and bolster our growth potential well into the future.”
The purchase price for the LFM acquisition is $105 million which will be paid with $77.5 million in cash and $27.5 million in newly issued Series A Perpetual Convertible Preferred Stock which will be held by Lincoln Financial Group. Entercom will fund the cash portion of the purchase price using cash on hand and by drawing on a portion of its existing $50 million revolving credit facility.

No comments:

Post a Comment