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On Wednesday, television broadcast company Nexstar Broadcasting Group (NASDAQ: NXST ) announced that its Nexstar Broadcasting subsidiary has entered into a definitive agreement to buy the assets of NBC Fresno, Calif. affiliate KSEE TV, for $26.5 million. Nexstar will be buying the station from privately-held Granite Broadcasting Corporation in a deal that the company says will be "immediately accretive" to its bottom line.
Nexstar has already taken possession of all "non-FCC license assets" in exchange for a $20 million payment, and signed a Time Brokerage Agreement entitling it to begin operating KSEE immediately. Upon receiving FCC approval, the transaction is expected to close midyear, and at that time, Nexstar will pay Granite the remaining $6.5 million.
In a statement, Nexstar noted that the KSEE acquisition meets its key test for making acquisitions -- which is that the purchase price be no more than approximately five-times annual pro forma cash flow.
Nexstar shares closed 2.3% higher in Wednesday trading following the announcement, but are plunging today (down 7.2% and counting), on news that major shareholders are selling as many as 3.45 million shares of stock in a secondary offering -- an offering that will likely put pressure on the share price, yet yield no cash whatsoever for Nexstar itself.