Meredith Completes KMOV-TV Buyout - Analyst Blog


Meredith Corporation ( MDP ) concluded the buyout of KMOV-TV, the CBS affiliate in St. Louis, from Gannett Co., Inc. ( GCI ) 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. ( MSO ), had earlier added; Every Day with Rachael Ray; FamilyFun; EatingWell; Parenting and BabyTalk to its portfolio.

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 share.

Meredith currently carries a Zacks Rank #3 (Hold). A better-ranked stock is Reed Elsevier plc ( RUK ), which holds a Zacks Rank #2 (Buy).

GANNETT INC (GCI): Free Stock Analysis Report

MEREDITH CORP (MDP): Free Stock Analysis Report

MARTHA STWT LIV (MSO): Free Stock Analysis Report

REED ELSEVR-ADR (RUK): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: GCI , MDP , MSO , RUK

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