On Monday, Tribune Co announced that it would buy 19 television stations from Local TV Holdings LLC. The deal was priced at US$2.73 billion in cash. This would make the acquisition the biggest TV broadcaster in the US.
Tribune sought to sell off its newspaper division to transform itself to a bigger broadcast company. The purchase from New York private equity company Oak Hill Capital Partners is another step for the publisher of the Los Angeles Times and the Chicago Tribune.
Last December, Tribune emerged from bankruptcy protection. Currently, it owns 23 TV stations and eight newspapers.
Tribune will now have stations in bigger markets including New York, LA, Miami, Denver, Seattle and Cleveland. This was after it acquired Local TV, making it reached the most households. Its shares increased by 6.6% at US$60.65 in afternoon trading.
The executives at Tribune said that the acquisition would bring US$3.5 billion in total revenue. A US$1.1 billion in earnings before interest, taxes, depreciation and amortization (EBITDA) is expected this year. Within five years, Local TV is expected to generate more than US$100 million.
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