Beasley Broadcast Group, Inc. (Nasdaq: BBGI) (“Beasley” or “the Company”), a large- and mid-size market radio broadcaster, announced that it entered into a definitive agreement to acquire WXTU-FM in Philadelphia, PA from Entercom Communications Corp. (NYSE: ETM) (“Entercom”)for $38.0 million in cash. Excluding one-time transaction costs, the acquisition of WXTU-FM is expected to be immediately accretive to Beasley’s free cash flow without materially altering the Company’s leverage. Beasley intends to fund the acquisition through borrowings under its credit facility and cash generated from operations.
The acquisition of WXTU-FM highlights Beasley’s focus on premium local programming and content and is complementary to the Company’s six other radio stations and digital operations in the Philadelphia market, the ninth largest designated marketing area in the country.
Commenting on the proposed transaction, Caroline Beasley, Chief Executive Officer said, “Our acquisition of WXTU-FM represents a strategically and financially compelling growth opportunity for our shareholders and further enhances our revenue and competitive position with a strong cluster of five FM and two AM stations in a key, top-ten market. Importantly, the addition of WXTU-FM is consistent with Beasley’s disciplined approach to growing our platform by executing accretive transactions that deliver valuable synergies and the potential for SOI margin improvement, all with a limited impact to our leverage.
“As the former owner of WXTU-FM, Beasley originally launched the station’s country music format in 1983 against the advice of a number of industry pundits who believed it wouldn’t succeed in the Philadelphia market. Instead, the station thrived and resulted in our successful exchange of WXTU-FM in 2014, as part of a larger asset exchange agreement with CBS Radio. Today, WXTU-FM remains one of the best and most listened-to country music stations in America. We are proud of this heritage and confident in our ability to continue the growth and success of WXTU-FM as part of the Beasley family of stations.
“Throughout Beasley Broadcast Group’s 56 year history, we have actively managed our station portfolio with the goal of serving the communities where we operate with the best local programming and brands, diversifying our operations, managing risk and improving financial results. This focus continues to be an essential component of our long-term growth and success. We look forward to realizing the strategic benefits of this transaction in the coming quarters as we leverage our legacy ownership and knowledge of the Philadelphia market to deliver great local programming to listeners while creating an even stronger marketing platform for local area businesses.”
Beasley will begin operating the station under a local marketing agreement on July 23, 2018. The transaction, expected to close during the late third quarter or fourth quarter of 2018, is subject to Federal Communications Commission approval and other customary closing conditions.