Business Context and Reporting Period
Company: Nexstar Broadcasting Group, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: July 18, 2012
Event: Entry into Material Definitive Agreements for the acquisition of television stations and digital media assets from Newport Television LLC.
Key Financial Metrics and Transaction Details
| Transaction Component | Buyer | Assets Acquired | Purchase Price | Deposit Paid |
|---|---|---|---|---|
| Nexstar Asset Purchase Agreement | Nexstar Broadcasting, Inc. | 10 TV stations and Inergize Digital media operations | $225.5 million | $22.6 million |
| Mission Asset Purchase Agreement | Mission Broadcasting, Inc. | 2 TV stations (Little Rock, Arkansas) | $60.0 million | $6.0 million |
| Total | Nexstar & Mission | 12 TV stations + Digital Ops | $285.5 million | $28.6 million |
Financing Structure: Nexstar expects to finance the acquisition using cash on hand and new bank loans. The company has received commitments for $645 million in Senior Secured Credit Facilities, consisting of a $570 million Term Loan B (due 2019) and a $75 million Revolving Credit Facility (due December 2017).
Material Changes and Closing Conditions
- Expected Closing: No earlier than December 2012.
- Regulatory Approvals: Closing is subject to Federal Communications Commission (FCC) approval and the expiration or termination of waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act).
- Interdependency: The Mission Broadcasting transaction is contingent upon the simultaneous consummation of the Nexstar Asset Purchase Agreement.
- Uncertainty: The filing states there can be no assurance that closing conditions will be satisfied.
Guidance, Risks, and Management Commentary
Forward-Looking Statements: The report contains forward-looking statements regarding the anticipated closing date and financing. Management notes these involve risks and uncertainties and undertakes no obligation to update them.
Risks and Contingencies:
- Failure to obtain FCC approval.
- Failure to satisfy antitrust waiting periods.
- Reliance on new debt financing commitments.
Unusual Items: The filing does not report unusual items or restatements; it focuses solely on the execution of the asset purchase agreements.
Investor Verification Checklist
- Verify the status of FCC regulatory approval for the transfer of 12 television stations.
- Confirm the final terms and interest rates of the $645 million Senior Secured Credit Facilities.
- Monitor the expiration of HSR Act waiting periods to assess the likelihood of a December 2012 closing.
- Review the full Asset Purchase Agreements (Exhibits 2.1 and 2.2) for specific covenants and indemnification provisions.