San Diego Radio: Tegna To Acquire KFMB Stations

The long-time owner of San Diego’s CBS 8 television and KFMB radio stations said Monday it is selling its holdings to publicly traded Tegna Inc. for $325 million in cash, according to The San Diego Union-Tribune.

Family owned Midwest Television, founded in 1952, has entered into a definitive agreement where Tegna will acquire KFMB-TV CBS 8 and The CW San Diego television properties, as well as talk radio station KFMB 760 AM and adult rock station KFMB 100.7 FM.

Based in McLean, Va., Tegna was created in 2015 when USA Today publisher Gannett Co. split its local television/digital media operations and its newspaper publishing arm into two separate companies.

KFMB 100.7 FM (30 Kw) Red=Local Coverage Area

Tegna owns 46 television stations in 38 cities nationwide – including a collection of leading network affiliated stations in the top 25 markets in the U.S.

It operates 10 stations in Texas, including in Houston, Dallas/Fort Worth, Austin and San Antonio. But it also has stations spread throughout the country from Seattle to Atlanta, Boise to Jacksonville.

Tegna said its local stations reach one-third of all television households. In California, its only other station is KXTV-TV ABC-10 in Sacramento.

KFMB 760 AM (5 Kw-D, 50 Kw-DA-N

There are no changes planned in operations of the KFMB properties, according to Tegna spokeswoman. Efforts to reach KFMB-TV were unsuccessful.

“This is a marriage of two great broadcasting cultures,” said Dave Lougee, chief executive of Tegna, in a statement. “We have long admired our dedicated colleagues in San Diego and look forward to continuing the stations’ high-quality journalism, editorial independence and commitment to their local community.”

Commenting on the transaction, Elisabeth Kimmel, Midwest Television, Inc.’s president and owner said, “This transaction is a testament to the outstanding value our employees have created serving the San Diego community. Having owned these properties for over 55 years, our family believed it imperative to find an excellent steward for television and radio stations that the community has embraced as part of the fabric of San Diego. We have found such a partner in TEGNA, an innovative media company that shares our commitment to the highest levels of journalistic integrity and serving the greater good of the community. We welcome TEGNA to San Diego with the knowledge that their values, resources and community leadership will serve our employees, consumers and customers for decades to come.”

The transaction, structured as an asset purchase, represents an attractive purchase price multiple of 6.6 times average expected 2017/2018 EBITDA, including expected run rate synergies and tax benefits. TEGNA expects the transaction to be accretive to EPS by a few cents within the first 12 months after close, and immediately accretive to free cash flow.

TEGNA will finance the transaction through the use of available cash and borrowing under its existing credit facility. The acquisition is subject to customary regulatory approvals and closing conditions, and is expected to close in the first quarter of 2018.