It's Official: Cumulus Acquires Dial Global, Announces Deals With Townsquare
August 30, 2013
As expected, Cumulus Media has announced a series of deals, including the acquisition of syndication giant Dial Global, along with multiple deals involving Townsquare Media. Meanwhile, Townsquare has made additional moves involving Peak Broadcasting.
Cumulus has officially acquired Dial Global for $260 million in cash (consisting of approximately $45 million attributable to equity and the retirement of $215 million of debt). The company has also sold 53 radio stations in 12 small & mid-sized markets to Townsquare Media for $238 million in cash (inclusive of the acquisition of net working capital). Cumulus is also swapping 15 radio stations with Townsquare in two small and mid-sized markets in exchange for the receipt of five stations in Fresno.
"These transactions give us the necessary scale to provide the marketing and enterprise solutions our advertising and affiliate partners require," said Lew Dickey, CEO of Cumulus. "Our goal is to be the leading producer of premium audio content distributed through multiple platforms while continuing to build our broadcast platform in the top 100 U.S. markets."
New content acquired through the Dial Global acquisition will include NFL, NCAA, NASCAR, Olympics, AP Radio News, NBC News and other popular, national programming.
Following these transactions, Townsquare will own 312 stations in 66 markets around the country. Townsquare will acquire the 53 Cumulus stations in: Battle Creek, MI; Cedar Rapids, IA; Danbury, CT; Faribault-Owatonna, MN; Kalamazoo, MI; Lansing, MI; Portland, ME; Portsmouth-Dover-Rochester, NH; Quad Cities, IA-IL; Rochester, MN; Rockford, IL; and Waterloo, IA.
Townsquare is also acquiring Peak, which owns assets including 11 radio stations in two markets (Boise and Fresno) for cash and equity units of Townsquare. Finally, Townsquare will exchange certain assets including the aforementioned five Fresno stations, which it is acquiring from Peak, for Cumulus assets including 15 radio stations in two markets (Dubuque, IA and Poughkeepsie, NY).
"These transactions represent the continued evolution of Townsquare Media into one of the nationís largest local media companies and allow us to reach a scale which opens the door to new strategic opportunities," commented Townsquare Chairman/CEO Steven Price. "The assets we are adding to our portfolio are market leading brands with strong competitive positions in their respective small and mid-sized markets. We are excited by the opportunity to deploy our differentiated local-media strategy across a broader footprint in order to better serve our communities and our advertising clients."
It had been rumored that once Cumulus merges Dial Global with its own syndication department, it will rename them as a re-launched Westwood One, but that has not been confirmed.
Cumulus expects the transaction to be deleveraging based upon identified cost synergies of approximately $40 million, with additional upside from revenue growth potential through the creation of new content vehicles for broadcast radio advertisers. Additionally, Cumulus believes the opportunity exists to distribute premium, curated audio content across emerging new media platforms. Further, Cumulus intends to service broadcasters' demands for premium content and enterprise solutions in Europe, the Americas and Australia.
The transactions are expected to close simultaneously following regulatory approval in the fourth quarter of 2013.
Jones Day is acting as legal counsel to Cumulus and Macquarie Capital is acting as financial advisor to Cumulus. Kirkland & Ellis LLP is acting as legal counsel to Dial Global.