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Scripps Closes Acquisition of Katz Broadcast Networks

The (NYSE: SSP) has announced the closure of its acquisition of the Katz broadcast networks, which distribute programming for targeted audiences over the air.

The purchase price was $302 million. Since was already a 5 percent owner in a portion of the business, its net purchase price is $292 million. The deal will be treated as a purchase of assets for tax purposes. After including the present value of the future tax benefits, the purchase multiple is about 8x, based on ’ forecast for 2018 segment profit.

The four networks are forecast to generate about $180 million in revenue and about $30 million in segment profit in 2018. The transaction is expected to be accretive to Scripps’ earnings in 2018 and beyond.

Scripps financed the transaction with $300 million of new floating-rate debt with a maturity date of 2024. Upon closing, Scripps’ leverage is expected to be about 3x on a pro forma 2017/18 blended basis.

The four national networks — Bounce, Grit, Escape and Laff — each reach more than 80 percent of all U.S. households and are among the fastest growing in television today. Founder Jonathan Katz, a former top Turner Broadcasting programming executive, will continue to lead the Katz networks business. The company, with about 130 employees, will remain based in the Atlanta area.

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