San Diego’s KFMB television and radio stations will change ownership for the first time in more than one-half century.
The stations’ current owner, Midwest Television Inc., announced on Dec. 18 that it has signed a definitive agreement with Tegna Inc. to sell its four stations for $325 million in cash.
The sale includes KFMB-TV, the region’s CBS television affiliate; KFMB-D2, the CW affiliate; and radio broadcast stations KFMB-AM and KFMB-FM.
The buyer, Tegna Inc., is based near Washington, D.C. and was previously known as Gannett Co. Inc. Gannett split its properties in 2015 and gave the name Tegna to its television stations and affiliated digital companies. Tegna stock trades on the New York Stock Exchange as TGNA.
The buyer will finance the transaction with available cash and borrowing under its existing credit facility.
Tegna said it is buying KFMB for 6.6 times average expected 2017-2018 EBITDA, including expected run rate synergies and tax benefits. The purchase price is attractive, Tegna said. EBITDA stands for earnings before interest, taxes, depreciation and amortization.
“This is a marriage of two great broadcasting cultures. 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,” Dave Lougee, president and CEO of Tegna, said in a statement issued by the two companies.
“We have a proven ability to be a strategic and disciplined consolidator with a track record of acquiring profitable businesses at an attractive, accretive valuation. Looking ahead, we will continue to evaluate additional investments and select transactions to build on our growth and success with a focus on creating shareholder value.”
Tegna operates 46 television stations in 38 markets. Its only current California station is KXTV, the ABC affiliate in Sacramento.
Prior to the 2015 split, Gannett was strategically growing its broadcasting segment. It bought Belo Corp.’s stations in late 2013 and six of London Broadcasting Co.’s Texas television stations in 2014. Tegna has a large presence in Texas.
The KFMB deal still needs regulatory approval. It is expected to close in the first quarter of 2018.
Midwest Television Inc., current holder of the FCC license, is based on Engineer Road and describes itself as San Diego’s leading multimedia company. Elisabeth Kimmel is Midwest Television’s president and owner.
“This transaction is a testament to the outstanding value our employees have created serving the San Diego community,” Kimmel said in a statement. “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.”