Entercom has announced it is growing its Philadelphia cluster with the purchase of Jerry Lee Broadcasting’s market leading AC “101.1 More-FM” WBEB for $57.5 million.

The deal marks the end of WBEB’s run as one of the last independently owned and operated major market FM. Jerry Lee and Dave Kurtz founded the station in 1963. Lee bought out the estate of his partner in 2005 leading to his default on the $65 million note in 2015 and a transfer of control to Sam Zell’s Zell Credit Opportunities Fund LP, however Lee continues to serve as president of the company.

To make room in its Philadelphia cluster, Entercom will divest Country 92.5 WXTU to Beasley Media for $38.0 million. Beasley owned WXTU until it swapped its first Philadelphia cluster to CBS Radio in 2014. Beasley will begin operating WXTU via LMA on Monday, July 23.

WBEB regularly leads the Philadelphia market’s ratings; holding a nearly 1 share point lead over Entercom’s second ranked Classic Hits 98.1 WOGL and Beasley Classic Rock 102.9 WMGK with an 8.5 share in the June 2018 Nielsen Audio ratings. The station is also one of the biggest beneficiaries of the seasonal flip to Christmas music as this year it held a 17.9 share in the Holiday 2017 ratings.

Entercom Communications Corp. (NYSE: ETM), a leading media and entertainment company and one of the two largest radio broadcasters in the U.S., today announced a definitive agreement to acquire 101.1 MORE FM (WBEB-FM) from Jerry Lee Radio, LLC in Philadelphia, PA for $57.5 million in cash. The company also announced that it has entered into an agreement to divest 92.5 XTU (WXTU-FM) in Philadelphia, PA to Beasley Broadcast Group, Inc. (Nasdaq: BBGI) for $38.0 million in cash. The transactions are immediately accretive to Entercom and are leverage neutral.

The acquisition of WBEB-FM, Philadelphia’s #1 rated station, is a complementary addition to Entercom’s existing portfolio of leading stations in the market that includes KYW Newsradio 1060, SportsRadio 94WIP, 96.5 TDY FM, 98.1 WOGL and Talk Radio 1210 WPHT.

“We are very pleased to add the legendary WBEB, one of the country’s most recognized and awarded stations, to our group,” said David Field, President and Chief Executive Officer, Entercom. “It is a terrific addition to our lineup that will enhance our ability to serve our listeners, customers and the community. I tip my cap to Jerry Lee, one of the industry pioneers and a visionary leader who built B101 into such a special station and has done so much for radio over the decades. We are saddened to say goodbye to our colleagues at WXTU, but know that they will be in great hands.”

A Local Marketing Agreement for WXTU will begin Monday, July 23. The transactions are expected to close by the end of the third quarter of 2018.

Entercom was advised by MVP Capital, LLC on the WBEB transaction. Methuselah Advisors acted as financial advisor to WBEB-FM.

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Beasley Broadcast Group, Inc. (Nasdaq: BBGI) (“Beasley” or “the Company”), a large- and mid-size market radio broadcaster, announced today 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.