Beasley Media Grows in Detroit with Purchase of WDMK
Beasley Broadcast Group, Inc. announced June 10 that it entered into a definitive agreement to acquire WDMK-FM and three translators in Detroit from Urban One for $13.5 million in cash. Excluding one-time transaction costs, the acquisition of WDMK-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.
Beasley currently owns and operates WCSX-FM, WRIF-FM and WMGC-FM in the Motor City.
Beasley’s acquisition of WDMK-FM is complementary to the Company’s three existing radio stations and digital operations in the Detroit market, the thirteenth largest designated marketing area in the country, and reflects the Company’s long-term focus on premium local programming and content.
Commenting on the proposed transaction, Caroline Beasley, Chief Executive Officer, said, “The accretive acquisition of WDMK-FM significantly enhances our revenue and competitive position in Detroit. Detroit is undergoing an exciting renaissance as a result of billions of dollars of new investments in the city’s residential, commercial, entertainment and cultural centers, all of which are driving new residents, businesses, tourists, employment and economic activity.”
“We entered the Detroit market in late 2016 and have consistently improved the operating results of the three stations we acquired, and we believe the proposed transaction is a strategically and financially compelling growth opportunity for our shareholders. The addition of WDMK-FM will mark further progress toward our goal of capturing 30 percent revenue share in each of our markets while delivering valuable synergies and the potential for SOI margin improvement.”
“Consistent with Beasley’s disciplined approach to growing our platform, the acquisition of WDMK-FM is expected to be immediately accretive to free cash flow, excluding one-time transaction costs, and with our strong balance sheet, we will continue to have the financial flexibility to make additional return-focused growth investments, while further reducing leverage and returning capital to shareholders.”
“We look forward to realizing the strategic benefits of the WDMK-FM transaction in 2020 as we continue to advance our initiatives focused on leveraging our premium local programming and brands, while aggressively rolling out our digital offerings and distribution capabilities to reinforce and grow Beasley’s leadership position across all audio platforms in our markets. This approach will enable us to deliver great local content to listeners while creating an even stronger marketing platform for local businesses.”
The transaction, expected to close during the fourth quarter of 2019, is subject to Federal Communications Commission approval and other customary closing conditions. The proposed transaction was brokered by Michael Bergner.
It is reported in the trade press that Urban One plans to continue its LMA with WGPR-FM until the end of 2019.