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E.W. Scripps has reached a deal to acquire Ion Media for $2.65 billion in a deal that will be partially financed by a $600 million investment from Warren Buffett’s Berkshire Hathaway.

Based in West Palm Beach, Fla., Ion Media owns 71 TV stations covering a wide swath of the country. Cincinnati-based Scripps is one of the largest independent owners of TV stations following a wave of M&A in local broadcast TV in recent years.

“This evolution of Scripps’ national television networks business, through the combination of ION, the Katz networks and Newsy, repositions the company in the television landscape,” said Scripps President and CEO Adam Symson. “With its strong revenue growth, high margins and significant cash flow, ION will make Scripps a more powerful and durable media business with significant near-term benefit as well as long-term value. ION Media is a distribution double threat – carried on cable and satellite through must carry while also capitalizing on cord-cutting and the growth of free over-the-air broadcasting. This transaction is another in a long list of Scripps’ transformative moves to where we see opportunity for growth and to benefit from the evolving media landscape.”

Berkshire Hathaway’s $600 million investment will be done in preferred stock that can be bought back by Scripps after five years. The deal also gives Berkshire Hathaway a warrant to purchase up to 23.1 million Class A shares of Scripps at $13 a share at any time, but no later than a year after all of the Scripps preferred shares have been redeemed. The deal does not give Berkshire Hathaway any seats on the Scripps board. But while Berkshire’s preferred stock is still outside, Scripps cannot pay dividends or repurchase its shares.

“As the media industry continues its rapid evolution, Berkshire Hathaway is fortunate to partner with this management team and the Scripps family, who have successfully anticipated the future of media for over a century,” said Berkshire Hathaway’s Ted Weschler.

Ion Media, headed by chairman-CEO Brandon Burgess, has kept a low profile in the TV landscape. The company’s stations carry the Ion network lineup of drama reruns and movies. Scripps noted that the stations have achieved revenue growth and earnings margins that exceed industry averages. Scripps estimates the transaction will save $500 million in synergy costs over six years.

Ion at present is controlled by Black Diamond Capital Management. The company had revenue of $587 million in 2019 and earnings before interest, taxes, depreciation and amortization of $335 million. Ion has 425 employees at present.

Scripps said it would plan to divest 23 of Ion’s stations to comply with FCC limits on broadcast TV station ownership.