Entercom To Acquire Lincoln Financial Sations

Entercom Communications Corp. announced today that it has entered into a definitive agreement to acquire Lincoln Financial Media from Lincoln Financial Group for $105 million plus working capital.

The transaction is subject to FCC and other customary regulatory approvals and closing conditions. The Company expects that the deal will close in the second quarter of 2015.

The agreement includes fifteen radio stations in the Atlanta, Denver, Miami and San Diego markets, and it will expand Entercom’s station portfolio to more than 130 stations in 26 markets.

David Field

Commenting on the agreement, Entercom President and CEO David J. Field stated: “We are excited toannounce the acquisition of Lincoln Financial Media and welcome the addition of their outstanding brands and talented broadcasters to Entercom. LFM is a great organization that has done an excellent job serving its listeners, customers and communities over many years and we look forward to buildingon that tradition. LFM is a perfect fit for us as it bolsters our position in Denver and expands our footprint into Atlanta, Miami and San Diego with terrific brands that have significant growth potential. Furthermore, it fulfills our disciplined acquisition criteria as it enhances our company’s competitive position and growth and should be accretive to shareholders in 2015 while having a minimal impact on leverage.”

"We are pleased to reach an agreement with Entercom Communications to sell Lincoln Financial Media," added Dennis R. Glass, president and CEO of Lincoln Financial Group. "Not only will this transaction allow Lincoln Financial Media to align itself with a well-respected media organization, but it also enables Lincoln Financial Group to focus on its strategy to grow its core lines of business."

The transaction is structured as an acquisition of the stock of LFM with a tax election that allows Entercom to receive a step-up in the tax basis of the station tangible and intangible assets providing additional future tax shields and enhancing future free cash flow.

The $105 million purchase price will be paid in the form of $77.5 million in cash and $27.5 million in new perpetual cumulative convertible preferred stock that will be issued to Lincoln. Entercom expects to finance the cash portion of the purchase price through a combination of its existing $50 million revolver, cash on hand, and through other financing sources, if necessary.

The convertible preferred stock will not count as debt under the Company’s debt agreements. With the use of convertible preferred stock and adjustments for pro forma cost savings reasonably expected, the transaction will have minimal impact on the Company’s leverage as defined under its credit agreement. Entercom anticipates that it will begin operating the LFM stations under a time brokerage agreement which is expected to commence in late January following the usual Justice Department regulatory review. In order to comply with the FCC’s station ownership limitations, the Company plans to divest one FM station in the Denver market.