CBS Corp. has signed an agreement to sell its five company-owned radio stations in West Palm Beach, Fla. for $50 million to Dean Goodman’s Palm Beach Broadcasting.
Preferring to maintain its focus on major markets, the company has previously sold radio stations in the mid-size Portland, Ore. and Denver markets.
The CBS stations involved in the sale are all FMs: WEAT, WHFS, WIRK, WMBX and WPBZ.
When the deal closes, Palm Beach Broadcasting LLC would acquire three stations from CBS and also acquire the right to sell two others to third parties to comply with FCC ownership limits; that’s necessary because Palm Beach acquired WRMF(FM), in the Palm Beach market last June.
Palm Beach-based Goodman and Garrison Investment Group own Palm Beach Broadcasting. Of the sale, he said radio is experiencing “a renaissance in the digital age,” and the company is pleased to be a part of that effort.
Analyst Marci Ryvicker of Wells Fargo Securities told clients that based on BIA data, “We believe that the multiple on this deal was in the low double digits, which is higher than recent transactions to date (which have been between 8-9x). We believe that this was a sale of opportunity and is consistent with CBS’ strategy of paring its smaller market stations in order to focus on large markets.” She also thinks this is a tax-efficient sale when paired with a recent CBS acquisition of a TV station in Long Island.
“We view this sale as a smart strategic and financial move — and shows CBS Radio’s ability to monetize its valuable assets,” Ryvicker wrote. “We do not expect significant [mergers and acquisitions activity] going forward but would not count out other opportunistic divestitures.”
The transaction is subject to regulatory and other approvals. CBS believes the deal could close in two to three months.
Once the sale is complete, CBS Radio will have 125 radio stations.
