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Source: Gray Television.

What: Shares of Gray Television (NYSE:GTN) rose as much as 15.3% on Tuesday morning. The bounce reversed a negative short-term trend, as Gray investors had endured a 38% slide over the last two months.

So what: Gray just announced a $443 million buyout of fellow TV and radio broadcast operator Schurz Communications. If approved and completed, the Schurz deal will add three new markets to Gray's asset portfolio and expand the company's presence in four others. Management expects Schurz to deliver positive cash flows from day one, and expects regulatory approvals by the end of the first quarter in 2016.

Now what: This is Gray's second market buyout in September alone, following the $100 million acquisition of the leading ABC affiliate in Cedar Rapids, Iowa. The company has made several smaller deals throughout the year. Some of these contracts have closed, but several are still pending. The company owned TV stations in 30 small or medium markets in the middle of 2013. When completed, this buyout binge will have expanded Gray to 49 media markets.

Gray is carefully hand-picking leading TV and radio assets in relatively small cities across the nation. Adding Schurz's stations in Springfield, Mo., and Anchorage, Alaska, will expand Gray's list of served states to 28. In all five of the new Schurz markets, the target company's stations are ranked either first or second in terms of viewer ratings.

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

If this agreement had been struck at the start of 2014, it would have increased Gray's total revenues and broadcast cash flows by more than 50%.

In other words, this deal is a potential game-changer for Gray. These markets, which also include the leading TV networks in Wichita, Kan., and South Bend, Ind., will boost Gray's economies of scale, leading to stronger margins and a better negotiating position when striking content license agreement for the long haul.

Gray nearly went bankrupt in 2008, but is coming back strong these days. Share prices have recorded a bumpy 46% gain over the last 52 weeks, rising more than sixfold in five years.

Anders Bylund has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.