The deal marks the latest example of consolidation in traditional TV. The union of Gray and Montgomery, Ala.-based Raycom will bring 142 TV stations under the same roof. The enlarged Gray will reach 24% of U.S. TV households and serve 92 markets, most of them falling below the top 50. The group’s largest markets are Tampa, Fla., Cleveland, and Charlotte, N.C.
“Today we announce the transformation of Gray Television into a true leader in the broadcast television industry,” said Hilton H. Howell, Jr., Gray’s chairman, president and CEO. “Combining our company with the excellent Raycom stations and the superb Raycom employees will create a powerhouse local media operation. Together, this new portfolio of leading local media outlets will excel at what they do best, which is to provide the local news that local communities trust, the entertainment and sports content that viewers crave, and the incredible reach that advertisers demand.”
Gray will fork over $2.85 billion in cash and cover the rest of the purchase price with stock, including $650 million newly issued preferred shares.
The post-acquisition plan calls for Howell to serve as co-CEO of the enlarged company alongside Raycom president-CEO Pat LaPlatney. Gray expects the deal to close by year’s end.
Gray has identified nine markets targeted for divestitures as the companies have overlapping station holdings. Those markets include Knoxville, Tenn., Toledo, Ohio, and Waco, Texas.