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Entercom Acquires Lincoln Financial Media

Entercom Lincoln Financial Media Denver Miami San Diego AtlantaThe Entercom/Lincoln Financial Media deal has been filed with the FCC.

To comply with market cap limits in Denver, Sports “104.3 The Fan” KKFN Longmont will be placed in the Pikes Peak Trust run by Elliot Evers for divestiture to a third party. The remainder of the Lincoln Financial Media stations will begin to be operated by Entercom via Time Brokerage Agreement on January 15 or two days after DOJ approval of the deal, whichever is the latter of the two. During the TBA and until the actual sales close, Entercom agrees to not change any formats on the to-be-acquired stations.

The $105 million purchase price will consist of a $77 million cash payment to Lincoln Financial, with the remainder consisting of Entercom stock grants to Lincoln.

Original Report 12/8: Entercom Communications has purchased Lincoln Financial Media’s fifteen stations for $105 million.

The properties included are:
Atlanta – Hot AC “Star 94” WSTR and Sports “ESPN 790 The Zone” WQXI

Denver – Country 98.5 KYGO, Comedy “Comedy 103.1” K276FK, Sports “104.3 The Fan” KKFN, Rhythmic CHR “KS 107.5“, Oldies “Cruisin 950” KRWZ, and Sports “1600 The Zone” KEPN

Miami – AC “101.5 Lite-FM” WLYF, Classic Hits “Magic 102.7” WMXJ, and Sports “104.3 The Ticket” 790 WAXY/104.3 WAXY-FM

San Diego – Alternative “FM 94.9” KBZT, Country 97.3 KSON/92.1 KSOQ, and Soft AC “Easy 98.1” KIFM

With Entercom already owning three FM’s and one AM in Denver, the company intends to divest one FM to stay under ownership limits. The company will begin operating the Lincoln stations under a Time Brokerage Agreement in late January following Justice Department approval of the deal.

Entercom Communications Corp. (“Entercom” or the “Company”) (NYSE: ETM) announced today that it has entered into a definitive agreement to acquire Lincoln Financial Media (“LFM”) from Lincoln Financial Group (“Lincoln”) (NYSE: LNC) for $105 million plus working capital. The transaction is subject to FCC and other customary regulatory approvals and closing conditions. The Company expects that the deal will close in the second quarter of 2015.

The agreement includes fifteen radio stations in the Atlanta, Denver, Miami and San Diego markets, and it will expand Entercom’s station portfolio to more than 130 stations in 26 markets.

Commenting on the agreement, Entercom President and CEO David J. Field stated: “We are excited to announce the acquisition of Lincoln Financial Media and welcome the addition of their outstanding brands and talented broadcasters to Entercom. LFM is a great organization that has done an excellent job serving its listeners, customers and communities over many years and we look forward to building on that tradition. LFM is a perfect fit for us as it bolsters our position in Denver and expands our footprint into Atlanta, Miami and San Diego with terrific brands that have significant growth potential.

Furthermore, it fulfills our disciplined acquisition criteria as it enhances our company’s competitive position and growth and should be accretive to shareholders in 2015 while having a minimal impact on leverage.”

“We are pleased to reach an agreement with Entercom Communications to sell Lincoln Financial Media,” added Dennis R. Glass, president and CEO of Lincoln Financial Group. “Not only will this transaction allow Lincoln Financial Media to align itself with a well-respected media organization, but it also enables Lincoln Financial Group to focus on its strategy to grow its core lines of business.”

The transaction is structured as an acquisition of the stock of LFM with a tax election that allows Entercom to receive a step-up in the tax basis of the station tangible and intangible assets providing additional future tax shields and enhancing future free cash flow. The $105 million purchase price will be paid in the form of $77.5 million in cash and $27.5 million in new perpetual cumulative convertible preferred stock that will be issued to Lincoln. Entercom expects to finance the cash portion of the purchase price through a combination of its existing $50 million revolver, cash on hand, and through other financing sources, if necessary.

The convertible preferred stock will not count as debt under the Company’s debt agreements. With the use of convertible preferred stock and adjustments for pro forma cost savings reasonably expected, the transaction will have minimal impact on the Company’s leverage as defined under its credit agreement.

Entercom anticipates that it will begin operating the LFM stations under a time brokerage agreement which is expected to commence in late January following the usual Justice Department regulatory review. In order to comply with the FCC’s station ownership limitations, the Company plans to divest one FM station in the Denver market.

Profile photo of Lance Venta
Lance Venta is the Owner and Publisher of RadioInsight.com and a consultant for RadioBB Networks specializing in integration of radio and the internet. Lance has two decades of experience tracking the audio industry and its use of digital platforms.

5 Comments

  1. Profile photo of only1moore


    It looks like KQMT/Denver is about to be put on the selling block….

  2. Profile photo of limegrass69


    Interesting. It seemed like CBS would have been an excellent suitor, especially given their recent swap with Beasley.

    • Profile photo of Cory


      What do you mean? CBS already left Denver and wants out of San Diego, they just have a much higher price tag than Lincoln. I think Entercom got these properties for a steal!

  3. Profile photo of JeremyAndrews


    I don’t know if this is a good thing or a bad thing. I always considered Entercom a bit better (not by much) than a lot of the larger broadcast companies in regards to localism. Now they’re getting bigger. There’s only one thing that can mean.

  4. Profile photo of only1moore


    From the way it looks, spinning off KKFN and retaining KQKS and KYGO’s formats does make sense.

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