Entercom Reaches Agreement
By Joe Nelson
BALA CYNWYD, Pa.--(BUSINESS WIRE)--Entercom Communications Corp. (“Entercom” or the “Company”) (NYSE: ETM) announced today:
- An agreement with Bonneville International Corporation (“Bonneville”) to exchange four stations in Denver for KSWD-FM (The Sound) in Los Angeles
- Time brokerage agreements (“TBA”) that will allow Bonneville and Entercom to operate the exchanged stations immediately upon the closing of the Lincoln Financial Media acquisition (“LFM”)
- A settlement with the Antitrust Division of the U.S. Department of Justice (“DOJ”) related to the Company’s previously announced acquisition of LFM
- An expectation that the closing of the LFM acquisition and commencement of the Bonneville-Entercom TBAs will take place within a few business days
Entercom has entered into an exchange agreement with Bonneville under which Entercom will exchange four stations in Denver for Classic Rock station The Sound in Los Angeles and $5 million in additional consideration. The stations Entercom will exchange with Bonneville are: KOSI-FM, KYGO-FM, KKFN-FM and KEPN-AM. Entercom owns KOSI-FM, while the remaining stations are being acquired through the acquisition of LFM.
Entercom and Bonneville will begin operating the exchanged stations under TBAs once the LFM transaction is completed. Closing of the Bonneville-Entercom exchange is subject to FCC approval and other customary closing conditions. Entercom expects the Bonneville transaction to close by the fourth quarter of this year.
Entercom also announced today that it has reached a settlement with the DOJ regarding the Company’s acquisition of LFM which was announced in December 2014. The DOJ initiated its Hart Scott Rodino review of the acquisition with a focus on the impact of the transaction on concentration in the Denver radio market. As a result of the exchange agreement with Bonneville, the DOJ has agreed to approve the Company’s acquisition of LFM. The Company has received FCC approval for the LFM acquisition and will close the transaction after DOJ terminates the Hart-Scott-Rodino waiting period.
Closing of the LFM acquisition and the commencement of the related Bonneville-Entercom time brokerage agreements are expected to take place within a few business days.
Commenting on the transactions, Entercom President and Chief Executive Officer David J. Field stated: “We are delighted to be moving forward on our long-delayed acquisition of Lincoln Financial Media and adding their terrific brands, markets and people to our organization. We are also very excited to be acquiring The Sound, the fastest growing radio station in Los Angeles, through our station exchange with Bonneville. Adding Los Angeles, Miami, Atlanta, and San Diego to our footprint will meaningfully enhance our ability to serve our listeners, customers, employees and shareholders. This is a great day for Entercom that will enhance our competitive position and bolster our growth potential well into the future."
The purchase price for the LFM acquisition is $105 million which will be paid with $77.5 million in cash and $27.5 million in newly issued Series A Perpetual Convertible Preferred Stock which will be held by Lincoln Financial Group. Entercom will fund the cash portion of the purchase price using cash on hand and by drawing on a portion of its existing $50 million revolving credit facility.
As a result of the LFM acquisition and the Bonneville exchange, Entercom will enter four new top 20 markets, Atlanta, Los Angeles, Miami and San Diego, and will add the following stations:
|Lincoln Financial Media and Bonneville Radio Stations to be added to Entercom|
|Atlanta||WSTR-FM||Hot Adult Contemporary|
|WQXI-AM||Hot Adult Contemporary|
|Translator – 103.1 FM||Comedy|
|Los Angeles||KSWD-FM||Classic Rock|
|Entercom Denver Stations after LFM acquisition and Bonneville Exchange|
|Denver||KALC-FM||Hot Adult Contemporary|
|Translator – 103.1 FM||Comedy|
Entercom Communications Corp. (NYSE: ETM), is the fourth-largest radio broadcasting company in the United States, with a portfolio of 125 highly-rated radio stations in 27 top markets across the country. Known for developing unique and highly successful locally programmed stations, Entercom’s brands reach and engage close to 40 million people each week, delivering a curated mix of outstanding local personalities and a broad range of compelling music, news, talk and sports content.
Founded in 1968, Philadelphia-based Entercom also operates hundreds of events each year attracting millions of attendees, and provides customers with a broad range of digital marketing solutions through its SmartReach Digitalproducts.