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Dielectric Averts Shutdown, Said to Ramp Up Quickly

Wells Fargo's Ryvicker calls deal “industry-friendly”

FM transmission equipment is definitely part of Sinclair’s plans for Dielectric going forward.

That’s according to Sinclair Broadcast Group, which Tuesday morning announced an agreement to purchase the assets of transmission equipment manufacturer Dielectric.

Previously, current owner SPX had said it would shutter Dielectric and focus on its other businesses.

We had reported other transmission companies may be interested in purchasing parts of Dielectric.

Baltimore-based Sinclair owns mostly television stations, however in April it announced plans to purchase Fisher Broadcasting, which owns two AMs and one FM in the Seattle-Tacoma market.

Sinclair EVP/CFO David Amy says in the announcement that Dielectric will maintain the Raymond, Maine operations and many of the core senior staff will be retained.

Sources tell Radio World Sinclair purchased the real estate and the intellectual property only; those who want to remain with Dielectric have been asked to submit applications and interview for positions. Radio World has contacted Sinclair for more information.

At its peak during the DTV transition, Dielectric had roughly 450 employees; that figure was down to some 55 as SPX planned to wind-down operations.

Experts predict Sinclair will want to get Dielectric back up to full speed quickly.

SPX originally announced in May it would shut down Dielectric by June 29.

At least one Wall Street analyst likes the deal. Wells Fargo analyst Marci Ryvicker characterizes the purchase as an “insurance policy” for television, noting that because Dielectric provided so much TV transmission gear, losing that as an option would have forced TV stations to turn to alternative, foreign-based suppliers. That would mean “replacing equipment would’ve been much more expensive — both in terms of pure cost, and revenue lost to longer repair times,” according to the analyst.

Wells Fargo sees the acquisition announcement as a “positive, industry-friendly move that could provide significant benefits for Sinclair in the long-run,” says Ryvicker in in a client note, one that could benefit Dielectric should the FCC’s proposed TV spectrum repacking actually occur.

The purchase price was not announced; Ryvicker calls that “immaterial,” since Sinclair said the price was “leverage neutral.”

Sinclair to Buy Dielectric