Transaction Will Expand Beasley’s Cluster to Four Stations in Healthy, Attractive Detroit Market
NAPLES, Fla., June 10, 2019 (GLOBE NEWSWIRE) -- Beasley Broadcast Group, Inc. (BBGI) (“Beasley” or “the Company”), a large- and mid-size market radio broadcaster, announced today that it entered into a definitive agreement to acquire WDMK-FM and three translators in Detroit, Michigan from Urban One (NASDAQ: UONEK) (“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’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 fourth quarter of 2019, is subject to Federal Communications Commission approval and other customary closing conditions. The proposed transaction was brokered by Michael Bergner.
About Beasley Broadcast Group
Celebrating its 58th anniversary this year, Beasley Broadcast Group, Inc., (www.bbgi.com) was founded in 1961 by George G. Beasley who remains the Company’s Chairman of the Board. Beasley Broadcast Group owns and operates 64 stations (46 FM and 18 AM) in 15 large- and mid-size markets in the United States. Approximately 19 million consumers listen to Beasley radio stations weekly over-the-air, online and on smartphones and tablets, and millions regularly engage with the Company’s brands and personalities through digital platforms such as Facebook, Twitter, text, apps and email. For more information, please visit www.bbgi.com.
Note Regarding Forward-Looking Statements:
Statements in this release that are “forward-looking statements” are based upon current expectations and assumptions, and involve certain risks and uncertainties within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Words or expressions such as “believe,” “intends,” “expects,” “expected,” “anticipates” or variations of such words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about expected impact of the acquisition. Key risks are described in our reports filed with the SEC including in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Readers should note that forward-looking statements are subject to change and to inherent risks and uncertainties and may be impacted by several factors, including, but not limited to: our ability to complete the acquisition and achieve the expected benefits of the acquisition; external economic forces that could have a material adverse impact on our advertising revenues and results of operations; the ability of our radio stations to compete effectively in their respective markets for advertising revenues; our ability to develop compelling and differentiated digital content, products and services; audience acceptance of our content, particularly our radio programs; our ability to respond to changes in technology, standards and services that affect the radio industry; our dependence on federally issued licenses subject to extensive federal regulation; actions by the FCC or new legislation affecting the radio industry; our dependence on selected market clusters of radio stations for a material portion of our net revenue; credit risk on our accounts receivable; the risk that our FCC broadcasting licenses and/or goodwill could become impaired; our substantial debt levels and the potential effect of restrictive debt covenants on our operational flexibility and ability to pay dividends; the failure or destruction of the internet, satellite systems and transmitter facilities that we depend upon to distribute our programming; disruptions or security breaches of our information technology infrastructure; the loss of key personnel; the fact that we are controlled by the Beasley family, which creates difficulties for any attempt to gain control of us; our ability to integrate acquired businesses and achieve fully the strategic and financial objectives related thereto and their impact on our financial condition and results of operations; and other economic, business, competitive, and regulatory factors affecting our businesses.
Our actual performance and results could differ materially because of these factors and other factors discussed in our SEC filings, including but not limited to our Annual Report on Form 10-K or Quarterly Reports on Form 10-Q, copies of which can be obtained from the SEC, www.sec.gov, or our website, www.bbgi.com. All information in this release is as of the date of this press release, and we undertake no obligation to update the information contained herein to actual results or changes to our expectations.