Miami’s Lite FM, Magic and The Ticket Going To Entercom as Lincoln Financial Sells Radio Assets

MIAMI —  One of America’s biggest radio industry operators just got a little more Lite, and has a Ticket to ride in the Magic City.

In an agreement announced this morning, Lincoln Financial Media–the radio division of Lincoln Financial Media–will disappear through its absorption by Entercom.

The value of the deal is a steal: $105 million, plus working capital.

By comparison, Cox Media Group in February 2000 purchased one Miami radio station — WFEZ 93.1 FM (then Classical WTMI) — for $100 million.

The transfer of Lincoln Financial Media’s radio assets is subject to FCC and other customary regulatory approvals and closing conditions. The deal will likely close in Q2 2015. However, Entercom anticipates that it will begin operating the Lincoln Financial Media stations under a time brokerage agreement starting in late January.

Entercom gets a total of 15 radio stations. In Miami, the company gains heritage AC WLYF-FM “101.5 Lite FM,” Classic Hits WMXJ-FM “Magic 102.7,”  and Sports Talk WAXY-AM 790 & FM 104.3 “The Ticket.”

Additionally, Entercom is picking up 11 radio stations located in Atlanta (including WSTR-FM “Star 94”), Denver, and San Diego (including KIFM-FM 98.1, KSON-FM 97.3 and KBZT-FM 94.9). In order to comply with the FCC’s station ownership limitations, Entercom will divest one FM station in the Denver market.

In formal comments, Entercom President/CEO David J. Field stated: “Lincoln Financial Media is a great organization that has done an excellent job serving its listeners, customers and communities over many years and we look forward to building on that tradition. LFM is a perfect fit for us as it bolsters our position in Denver and expands our footprint into Atlanta, Miami and San Diego with terrific brands that have significant growth potential. Furthermore, it fulfills our disciplined acquisition criteria as it enhances our company’s competitive position and growth and should be accretive to shareholders in 2015 while having a minimal impact on leverage.”

Dennis R. Glass, President/CEO of Lincoln Financial Group, added, “Not only will this transaction allow Lincoln Financial Media to align itself with a well-respected media organization, but it also enables Lincoln Financial Group to focus on its strategy to grow its core lines of business.”

The transaction is structured as an acquisition of the stock of LFM with a tax election that allows Entercom to receive a step-up in the tax basis of the station tangible and intangible assets providing additional future tax shields and enhancing future free cash flow. Specifically, the $105 million purchase price will be paid in the form of $77.5 million in cash and $27.5 million in new perpetual cumulative convertible preferred stock that will be issued to Lincoln. Entercom expects to finance the cash portion of the purchase price through a combination of its existing $50 million revolver, cash on hand, and through other financing sources, if necessary.

Complete List of Stations to Be Acquired

About Entercom

Entercom Communications Corp. (NYSE:ETM) , led by President and CEO David Field, is one of the largest radio broadcasting companies in the United States, with a nationwide portfolio of over 100 stations in 23 markets, including San Francisco, Boston, Seattle, Denver, Portland, Sacramento and Kansas City.

(C) 2014 The Jacobson Consultancy.