TV spin-offs take Q2 broadcast station M&A volume to $728.9MN | Media Analysis | Business | News | Rapid TV News
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The deal frenzy in US broadcasting showed no signed of slowing down in the second quarter of 2016, driven mainly by a buoyant spin-off market, according to research from SNL Kagan.

kagan 2 4 JUly 2016The analyst calculated that US broadcast station merger and acquisition (M&A) volume reached $728.9 million in the second quarter of 2016, with the TV deal market racking up $681.2 million. Four-fifths of this figure came from spin-offs initiated by Nexstar Broadcasting Group to comply with FCC regulations impacting its pending its acquisition of Media General, announced on 27 January 2016.

As attempted to divest assets to pass regulatory scrutiny of its planned takeover of its $4.6 billion acquisition of the local US TV affiliate powerhouse, meeting a mandated 39% US television household US ownership cap, Nexstar arranged for a number of spin-offs, selling a total of 12 stations in ten markets to five different buyers. The largest of these deals — and the top TV deal of the quarter — was the $270.0 million sale of KWQC and WBAY to Gray Television .The other spin-offs involved two stations for Graham Holdings Company valued at $120.0 million; five stations for $115.0 million with MSouth Equity Partners and Heartland Media; Bayou City Broadcasting Lafayette, for one full- and one low-power station for $40.0 million; and one station for $350,000 with Marquee Broadcasting.

Overall Nexstar reported an average 11.1x trailing seller's multiple for the spin-offs and SNL Kagan estimates that translates to a forward (2016/17) multiple of 10.0x.

Kagan added that the second quarter's largest TV deal not involving Nexstar was the TV industry exit of Calkins Media, which sold its three TV stations for $82.0 million to Raycom Media Inc. and American Spirit Media LLC. Due to the auction quiet period initiated by the FCC on January 12, this deal will not receive FCC approval before the end of the controversial Spectrum Incentive Auction.