Boston, MA 02/12/2014 (wallstreetpr) – Emmis Communications Corporation (NASDAQ:EMMS) which is a diversified media company specializing in radio broadcasting has announced the agreement with YMF Media for the acquisition of urban adult contemporary WBLS 107.5 FM which is New York no 2 radio station. The agreement also involves the acquisition of WLIB 1190AM which is the first African-American targeted radio station. The agreement for the two radio station has been valued at $131 million in total cash.
Through the new acquisition, Emmis Communications net income is expected to double as it currently owns WQHT HOT 97. Emmis Communications continues to highly believe in the radio industry thus the purchase of the two radio station. its chief executive officer and President Jeff Smulyan was quoted as saying immediately after the announcement “Today’s announcement is indicative of our belief in the US radio industry and our desire to increase our footprint in the nation’s largest market, Emmis has deep ties to the New York African-American community, and it is with great pride we take the helm of these iconic stations”
Terms of the agreement
Under the agreement Emmis Communications is expected to pay the full amount in two installments with the first installment expected to be around $55 million and will occur immediately after initial granting of the FCC’s consent to assignment of the stations. The second payment which will be $76 million to be paid in February 2015.
Emmis communication is expected to finance the acquisition through senior credit facility and may opt to access the institutional loan market in the coming months. The agreement is protected Under the Hart Scott Rodino Antitrust Improvement Act of 1976 if there is any case of expiration or earlier termination.
Financial outlook of the new acquisition
WBLS and WLIB reported net revenues totaling $31.9 during F2013 at the back of a total $16.5 million in total operating expenses. Excluding depreciation and amortization the station net operating expense came in at $15.4 million. By combining the two stations with HOT 97 Emmis Communication projects to save a total of $3 million in operating expenses.
It is not going to be a big a transition for the two acquisition as WBLS/WLIB studios have been co-located with those of HOT 97 since 2012 and most of the employees in this two entities are alumni’s of Emmis Communications Corporation (NASDAQ:EMMS).
