Cumulus Dials Up Acquisitions and Divestitures

Radio broadcaster Cumulus Media (NASDAQ: CMLS  ) announced yesterday that it has agreed to a series of transactions that continue its efforts to reshape its footprint in the top 100 markets. 

Cumulus said it acquired sports content distributor Dial Global (NASDAQOTH: DIAL  ) for $260 million cash. The purchase enables the broadcaster the chance to deliver more options to approximately 10,000 radio stations, other media platforms, and international platforms, including sports, news, talk, music, and programming services content. Dial will provide Cumulus with programming from the NFL, NCAA, NASCAR, Olympics, AP Radio News, and NBC News.

In a separate announcement, Dial said the purchase price wasn't enough to fully cover its debts and preferred stock liquidation preferences of preferred shareholders, necessitating the holders of Dial's Series A preferred stock to agree to contribute a portion of their Series A shares, while holders of its B, C, and D preferred stock have agreed to contribute all of their preferred shares to the company for no consideration. 

Upon completion of the merger, each outstanding share of Dial's common stock will be converted into the right to receive $0.155, and the balance of the merger consideration, after repayment of indebtedness and transaction expenses and subject to certain escrow holdbacks, will be distributed as merger consideration to Dial's Series A preferred stockholders.

Cumulus also said it sold 53 radios in 12 small- and mid-size markets to Townsend Media for $238 million, as well as swapping 15 other stations in similar small- and mid-sized markets in exchange for five stations in Fresno, Calif.

Noting the company's goal is to be the leading producer of premium audio content distributed through multiple platforms, Cumulus CEO Lew Dickey said, "These transactions give us the necessary scale to provide the marketing and enterprise solutions our advertising and affiliate partners require."

The transactions are expected to close simultaneously following regulatory approval in the fourth quarter of 2013.

Jones Day is acting as legal counsel for Cumulus Media, and Macquarie Capital is acting as its financial advisor. Kirkland & Ellis is acting as legal counsel to Dial Global.


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