) concluded the buyout of KMOV-TV, the CBS affiliate in St.
Gannett Co., Inc.
) and Sander Media LLC for $177 million.
In order to enhance its television portfolio, Meredith on Dec
23, 2013 entered into a deal to acquire television stations in
Phoenix and St. Louis from Gannett and Sander Media for $407.5
million in cash. The stations, which formed part of the
agreement, included KTVK - an independent station in Phoenix -
KASW - the CW affiliate in Phoenix - and KMOV - the CBS affiliate
in St. Louis.
A third party, SagamoreHill of Phoenix will buy the license
and certain assets of KASW but Meredith will provide operational
services. Meredith hinted that by June end it will complete the
acquisition of KTVK-TV and KASW-TV.
Meredith stated that post completion, the acquisitions will be
accretive to earnings by 16-18 cents a share on $105-$115 million
of revenue contribution a year.
The deal is the latest among several strategic acquisitions
made by Meredith. The company, which competes with
Martha Stewart Living Omnimedia Inc.
), had earlier added Allrecipes.com; Every Day with Rachael Ray;
FamilyFun; EatingWell; Parenting and BabyTalk to its
These acquisitions form part of Meredith's Total Shareholder
Return (TSR) strategy that was initiated in Oct 2011, and drove
revenues and cash flows.
Apart from providing an update on acquisitions, Meredith also
reaffirmed its earnings projection of 63 cents to 68 cents a
share for the third quarter and $2.60 to $2.95 per share for
fiscal 2014. The current Zacks Consensus Estimate for the third
quarter and fiscal 2014 are respectively 66 cents and $2.70 per
Meredith currently carries a Zacks Rank #3 (Hold). A
better-ranked stock is
Reed Elsevier plc
), which holds a Zacks Rank #2 (Buy).
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