Sinclair adds 7 stations to footprint in $200m acquisition

Michelle Clancy | 09-09-2011

Sinclair Broadcast Group is buying Four Points Media for $200 million in a move to consolidate some operations while expanding footprint, resulting in what the company hopes is a net incremental cash flow gain.

"As we have discussed publicly, one of our bigger challenges has been how best to use our balance sheet to maximise shareholder returns, and grow and strengthen our portfolio of stations in an accretive manner," said David Smith, President and CEO of Sinclair, in a statement.

"The Four Points acquisition will allow us to capitalise on operating synergies, including adding these stations under certain existing contracts, leading to both additional earnings and free cash flow next year. We estimate that on a pro forma basis with these synergies this transaction will grow cash flow by an incremental low teen percentage rate in 2012."

Four Points owns and operates seven stations in four markets, reaching 2.65% of the U.S. TV households. The affiliates are located in Salt Lake City, Austin, Texas, West Palm Beach/Fort Pierce, Fla., and Providence R.I./New Bedford, Mass.

"The stations, which are in prime middle-markets, are a perfect complement to our portfolio of assets and TV footprint," said Smith.

The transaction is subject to the FCC's approval as well as customary antitrust clearance, and is expected to close in the first quarter of 2012 given that no waivers are required under FCC rules.

"We believe this transaction is in the best strategic interests of both companies and our respective viewers," said Chris Matson, Four Points' CFO. "We expect that the Four Points stations will integrate quite well with Sinclair's portfolio and should benefit from being a part of one of the leading U.S. broadcasting companies."