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Cumulus to Acquire Susquehanna Radio

Cumulus to Acquire Susquehanna Radio

Cumulus Media and investors have formed a partnership to acquire Susquehanna Radio from its parent company, Susquehanna Pfaltzgraff Co. for about $1.2 billion.
If the deal closes as expected in the first half of 2006, Cumulus Media, directly and through its investment in Cumulus Media Partners, would own and operate 343 radio stations in 67 U.S. media markets.
Susquehanna Radio, the largest privately owned radio broadcasting company in the U. S., has 33 radio stations in 8 markets including: San Francisco, Dallas, Houston, Atlanta, Cincinnati, Kansas City, Indianapolis and York, Pennsylvania.
Cumulus Media, Inc., will contribute its two FM stations in Houston and two FM stations in Kansas City, in return for its membership interest in the partnership. Cumulus Media, Inc. will initially own approximately 25% of Cumulus Media Partners, with performance incentives that can increase that stake up to approximately 40%. Pursuant to a management agreement, Cumulus Media, Inc. will be paid a quarterly management fee.
In addition to Cumulus, the investor partners are: Bain Capital, The Blackstone Group and Thomas H. Lee Partners.
Cumulus Media Partners is receiving debt financing for the acquisition from Deutsche Bank, Merrill Lynch, Goldman Sachs, and UBS. Additionally, Deutsche Bank Securities, Inc., acted as exclusive financial advisor to Cumulus Media, Inc. Deutsche Bank Securities and Goldman Sachs acted as financial advisors to Cumulus Media Partners. Jones Day acted as legal counsel for Cumulus Media, Inc. and Cumulus Media Partners in connection with the transaction, and Simpson Thacher & Bartlett LLP acted as legal counsel for the investor group. UBS Investment Bank acted as exclusive financial advisor to Susquehanna Pfaltzgraff.
Parties expect the deal to close in the first half of 2006.
Susquehanna Pfaltzgraff Co. has also agreed to sell its cable television and broadband division to Comcast Corporation.