Gray Television to buy Raycom Media for $3.65B and bolster Portfolio


Published Date : Jun 26, 2018

Mergers and acquisitions are gaining traction among broadcaster companies in the U.S. riding on the wave of consolidation in the U.S. media industry. These moves are marked by a slew of deals by larger telecom or media companies to acquire broadcasters to up the ante for online media companies. Amid rapidly rising volumes of content, the U.S. Federal Communications Commission (FCC) increasingly seems to support these deals in recent times. Against this background, Gray Television Inc., one of the leading television broadcast groups in the U.S., on June 25, 2018 announced that it has agreed to acquire Raycom Media Inc. at $3.65 billion.

The deal, a mix of cash and stock, will enable the broadcaster to consolidate its footprint across the region, especially in the sub-regions of Midwest and South. Furthermore, the company specializing in traditional TV can rope in more advertising. The combined entity formed out of the partnership will serve the needs of as many 92 markets by providing 142 full-fledged television stations.

Combined Entity to help Gray fortify Presence across U.S. Broadcasting Television Industry

The partnership will help Gray expand its local reach-making its presence in 24% of total television households in the U.S. According to the company, the move will enable it to leverage the potential of Raycom stations and reach a notch higher toward the path to becoming a global leader in in the broadcast television industry. The combined portfolio will help it beam more news preferred by local communities in the U.S. and also attract advertisers.

Divestitures planned in Nine Markets to cover Overlapping Interests    

Atlanta-based television broadcasting company has agreed to pay $2.85 billion in cash for the purchase. Further, it will fund the deal through shares worth of $650 Mn in preferred stock and 11.5 Mn in common stocks. Of note, the companies have overlapping station holdings in nine markets that include Texas, Waco, Ohio, Toledo, and Knoxville. Thus, Gray has planned to divest television station in these markets.

The deal will tentatively close by the end of this year, after it gets a go-ahead by the shareholders of both the companies and antitrust approval by authorities.