Gray Television is buying CBS affiliate WCAX-TV, which covers the Burlington, Vermont-Plattsburgh, New York, market, from Mt. Mansfield Television for $29 million.
Factoring in expected synergies, Gray anticipates the purchase price multiple will be less than six times expected blended 2016-2017 pro forma broadcast cash flow and that the transaction will be leverage neutral, immediately free cash flow accretive, and funded primarily through the use of cash on hand, according to a news release.
With the purchase, Gray will enter a market that includes both the state capital of Montpelier as well as colleges and universities including the University of Vermont, SUNY-Plattsburg, and Dartmouth.
The deal will have to undergo regulatory reviews, but the companies expect to close the transaction in the third quarter of 2017.
“Gray is thrilled that the Martin family selected us as the new steward of Vermont’s very first television station,” said Kevin Latek, Gray’s executive vice president, in a statement. “We will proudly build upon WCAX’s strong foundation and six decades of success as we expand into Vermont, northern New York and northern New Hampshire with another great leading local media institution.”
For Gray, the WCAX deal comes relatively shortly after the broadcaster announced a separate deal to acquire stations in Florida and Maine. Gray will be getting CBS affiliate WABI in Bangor, Maine, and ABC affiliate WCJB in Gainesville, Florida.
Gray is expecting to close the transaction in the second quarter of 2017 using primarily cash on hand. According to a release, the deal for the stations will produce two-year blended broadcast cash flow margins greater than 50% and will be immediately free cash flow accretive.