Gray Television, owners of Valley News Live, to become third largest broadcaster in US with purchase of Raycom Media

Gray Television, owners of Valley News Live, to become third largest broadcaster in US with purchase of Raycom Media

Gray Television, the guardian firm of Valley News Live, introduced on Monday the plan to purchase Raycom Media Inc. for $three.6 billion .

The purchase would create the third largest tv broadcast group in the nation serving 92 markets with 142 full-power tv stations.

The purchase would give Gray protection of 24% of US tv households. The acquisition could be topic to regulatory approval. The full press launch could be seen beneath.

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NEWS RELEASE
FOR IMMEDIATE RELEASE:
Monday, June 25, 2018
4370 Peachtree Road, NE, Atlanta, GA 30319 | P 404.504.9828 F 404.261.9607 | www.grey.television GRAY AND RAYCOM TO COMBINE IN A $three.6 BILLION TRANSACTION Companies Will Form Third Largest Television Broadcast Group Atlanta, Georgia and Montgomery, Alabama – Gray Television, Inc. (“Gray”) (NYSE:GTN and GTN.A) and Raycom Media, Inc. (“Raycom”), an employee-owned firm, collectively
introduced at present that they’ve entered into an settlement to mix their corporations in a transformative transaction that can create the one largest proprietor of top-rated native tv stations and digital belongings in the nation. This transaction marks Gray’s transformation from a small, regional broadcaster into a number one media firm with nationwide scale primarily based on high-quality stations with distinctive expertise
in enticing markets. Gray and Raycom have extremely complementary portfolios of tv stations in addition to extremely complementary firm cultures, award-winning journalistic commitments, and
lengthy histories of commitments to distinctive neighborhood service. Gray in specific is delighted to announce that, upon the closing, Raycom President and CEO, Pat LaPlatney, will become Gray’s President and Co-Chief Executive Officer. In addition, Mr. LaPlatney and Raycom’s former President and CEO, Paul McTear, each of whom are at the moment members of Raycom’s Board of Directors, will be a part of Gray’s Board of Directors. At that point, Hilton Howell will become Executive
Chairman and Co-Chief Executive Officer of Gray. The transaction is topic to customary closing circumstances and regulatory approvals. The
events count on to shut the transaction in the fourth quarter of 2018.
Gray additionally introduced at present that, on July 1st, Bob Smith will become its Chief Operating Officer and Nick Waller will become its Chief Administrative Officer. Currently, Bob and Nick function Co-Chief Operating Officers. In his new position, Bob will oversee station operations and gross sales operations by means of the closing of the transaction. During that interval, Nick will oversee human sources, data know-how, visitors and CRM programs, capital tasks, and efficiency
benchmarking. Nick additionally will give attention to the transition and integration of pending acquisitions.

As detailed beneath, Gray and Raycom will host a convention name for all stakeholders and different events starting at 9:00 a.m. Eastern at present to focus on this transaction additional.
Additional details about the transaction could be obtained from Gray’s Current Report on Form Eight-Okay being filed with the SEC in connection with the announcement of this transaction, together with the
investor presentation furnished therewith, which presentation can even be out there on Gray’s web site.

Combined Television Markets
A Compelling Combination The mixture will create a dynamic broadcaster with significant scale, important working leverage, and a compelling portfolio of prime quality belongings. In specific, the mixed
firm will consist of the next broadcast belongings, giving impact to all different pending acquisitionsby each corporations and prior to any divestitures:
• 142 full-power tv stations serving 92 markets, the third largest portfolio of stations and markets in the nation.
• A high-quality station portfolio that reaches 24 p.c of U.S. tv households, starting from giant markets similar to Tampa-Sarasota, Cleveland, and Charlotte, to some of the smallest markets like Ottumwa, Fairbanks, Presque Isle and North Platte.
• 62 tv stations ranked first in all-day Nielsen rankings in their native markets, which is the very best quantity of top-ranked tv stations owned by any broadcaster.
• 92 p.c of markets with the #1 or the #2 Nielsen rated native tv station.
• Nearly 400 separate program streams together with roughly 165 associates of ABC,
NBC, CBS, and Fox, and over 100 associates of CW, MyNetwork, and MeTV.



In addition to prime quality tv stations, Gray will purchase a number of further Raycom companies that can outcome in a extra diversified media firm. These companies embody:
• Raycom Sports, a advertising and marketing, manufacturing and occasions administration and distribution firm.
• Tupelo Raycom, a sports activities and leisure manufacturing firm.
• RTM Productions, an automotive programming manufacturing and advertising and marketing options firm.
• Broadview Media, a post-production/digital signage firm.
Raycom has initiated processes to promote or spin off Community Newspaper Holdings, Inc.

(“CNHI”), which owns neighborhood newspapers and knowledge merchandise together with over 100 titles positioned in 23 states, in addition to PureCars, a digital advert platform for the automotive trade. As a outcome, Gray is not going to purchase both CNHI or PureCars as half of this transaction.
Excluding CNHI and PureCars, the mixed web income of each corporations on a blended 2016/2017 foundation would whole roughly $2 billion.

Transaction Summary

Gray expects that the Raycom transaction can be considerably accretive on a free money stream per share foundation.
Under the phrases of the merger settlement between the events, Gray will purchase Raycom for $three.647 billion in whole proceeds, consisting of $three.547 billion in enterprise worth and $100 million of Raycom money. The consideration will consist of $2.85 billion in money, $650 million in a brand new collection of most well-liked inventory, and 11.5 million shares of Gray frequent inventory. Wells Fargo has underwritten the debt financing portion of the transaction in the quantity of $2.525 billion. Gray’s current Term Loan B and Senior Unsecured Notes will stay in place. Expected robust free money stream era by means of the closing of all pending transactions and
all through 2018 ought to enable Gray to deleverage its capital construction following the closing. Gray anticipates that, assuming a year-end 2018 closing, its whole leverage ratio, web of all money, would approximate 5.zero instances trailing eight-quarter working money stream, together with estimated synergies. Including anticipated synergies and excluding CNHI and PureCars, the transaction purchase value represents a a number of of roughly 7.5 instances a blended common of Raycom’s anticipated
2018/2019 working money stream and seven.Eight instances a blended common of Raycom’s anticipated 2017/2018 working money stream. This a number of contains roughly $80 million in recognized contract, insourcing, and different effectivity synergies throughout the first full calendar 12 months following the closing. The a number of additionally contains the anticipated web current worth of the deferred tax asset ensuing from Raycom’s web working losses.
The transaction has been accepted unanimously by the Boards of Directors of each Gray and Raycom. The transaction has additionally been accepted by the requisite vote of the Raycom shareholders. No Gray shareholder vote can be required. Gray shareholders will retain 89 p.c of the financial possession of the Company following the closing.

Clear Regulatory Path to Prompt Closing
As famous, Gray and Raycom have extremely complementary portfolios, and, as such, their mixture ought to create solely minimal regulatory points. To facilitate immediate approvals and subsequently the transaction closing, Gray has elected to divest tv stations in every of the 9
overlap markets slightly than search regulatory approvals of doubtlessly permissive mixtures in sure markets. Specifically, Gray intends to retain and divest stations in the overlap markets as
follows:
Market (DMA Rank and Name)
Retained Full-Power Stations
(November 2017 All-Day Rank)
Divested Full-Power Stations
(November 2017 All-Day Rank)
61 Knoxville Gray WVLT (#2 CBS) Raycom WTNZ (#5 Fox)
78 Toledo Gray WTVG (#2 ABC) Raycom WTOL (#1 CBS)
86 Waco Gray KWTX (#1 CBS) Raycom KXXV (#three ABC)
108 Tallahassee Gray WCTV (#1 CBS) Raycom WTXL (#2 ABC)
112 Augusta Gray WRDW (#2 CBS) Raycom WFXG (#three Fox)
144 Odessa Gray KOSA (#1 CBS) Raycom KWES (#2 NBC)
151 Panama City Gray WJHG (#1 ABC) Raycom WPGX (#four Fox)
154 Albany Raycom WALB (#1 ABC) Gray WSWG (#three CBS)
173 Dothan Gray WTVY (#1 CBS) Raycom WDFX (#three Fox)
Today, Wells Fargo Securities will start a proper course of to market the divestiture stations to certified third events. The divestitures could take the shape of money gross sales, swaps involving different tv stations, or a mixture of money and swaps. Interested events ought to contact Wells
Fargo Securities straight and mustn’t contact Gray or Raycom concerning the divestiture alternatives. The deliberate divestiture stations collectively signify lower than four p.c of the working money stream
of the mixed firm (excluding CNHI and PureCars).
Based on the foregoing divestiture plan and the dearth of different anticipated materials regulatory considerations that may come up from the mix, the events count on to shut their transaction following receipt of regulatory and different approvals in the fourth quarter of 2018.

CEO Comments on Transformative Transaction
“Today we announce the transformation of Gray Television into a true leader in the broadcast television industry,” stated Hilton H. Howell, Jr., Gray’s Chairman, President and CEO. “Combining our firm with the superb Raycom stations and the very good Raycom staff will create a powerhouse native media operation. Together, this new portfolio of main native media retailers will excel at what they do greatest, which is to present the native information that native communities belief, the leisure and sports activities content material that viewers crave, and the unimaginable attain that advertisers demand. Indeed, it is a transaction in which there could be little question that local people requirements can be honored and embraced. We are excited to welcome the devoted reporters, account executives, and technologists of Raycom to our rising company household. On behalf of the Board, our staff, and our buyers, I convey our deepest gratitude to Jim Ryan and Kevin Latek for main our efforts
on this momentous, transformative transaction.” “We are thrilled to be becoming a member of Gray Television as we share the identical core values of
journalistic excellence and neighborhood service,” stated Pat LaPlatney, Raycom Media’s President and CEO. “Together, we can be a stronger, extra impactful pressure for our audiences, advertisers, and communities. I’ve super respect for the best way Hilton Howell and Gray Television have grown their portfolio with a give attention to localism. I look ahead to working alongside Hilton and the splendidly proficient folks of Gray Television because the mixed entities create a fair larger alternative for development as a pacesetter in the printed trade. I additionally need to lengthen a particular thanks to Paul McTear, Becky Sheffield, Ellenann Yelverton and your complete Raycom workforce for his or her tireless efforts on this transaction.

Advisors:
Wells Fargo Securities, LLC served as monetary advisor and Cooley LLP and Jones Day served as authorized counsel for Gray. Stonebridge Capital served as monetary advisor and Robinson Bradshaw and Covington & Burling served as authorized counsel for Raycom.
About Gray:
Gray owns and/or operates over 100 tv stations throughout 57 tv markets that collectively broadcast over 200 program streams together with over 100 channels affiliated with the CBS Network, the NBC Network, the ABC Network and the FOX Network. Our portfolio contains the number-one and/or number-two ranked tv station operations in primarily all of our markets, which collectively cowl roughly 10.four p.c of whole United States tv households. For additional data, please go to www.grey.television.
Gray Contacts:
Website: www.grey.television
Hilton H. Howell, Jr., President and Chief Executive Officer, 404-266-5512
Kevin P. Latek, Executive Vice President, Chief Legal and Development Officer, 404-266-8333
Jim Ryan, Executive Vice President and Chief Financial Officer, 404-504-9828
About Raycom:
Raycom Media, an employee-owned firm, is one of the nation’s largest privately-owned native media corporations and owns and/or gives companies for 65 tv stations and a couple of radio stations in 44 markets positioned in 20 states. Raycom Media owns or gives companies for stations overlaying 16% of U.S. tv households and employs over Eight,300 people in full and part-time positions. In addition to tv stations, Raycom Media is the guardian firm of CNHI
(neighborhood newspapers and knowledge merchandise; over 100 titles positioned in 23 states), PureCars (digital advert platform for the automotive trade), Raycom Sports (a advertising and marketing, manufacturing and occasions
administration and distribution firm), Tupelo Raycom (sports activities and leisure manufacturing firm), RTM Productions (automotive programming manufacturing and advertising and marketing options firm) and Broadview Media (a post-production/digital signage firm). Raycom Media is headquartered in Montgomery, Alabama.
Raycom Contacts:
Website: www.raycommedia.com
Pat LaPlatney, President and Chief Executive Officer, 334-229-0305
Media Contact:
Nichole Bigley, Edelman
404-395-8810
[email protected]
Forward-Looking Statements:
This press launch comprises sure ahead trying statements which are primarily based largely on Gray’s present expectations and replicate numerous estimates and assumptions by Gray. These statements are statements apart from these of historic reality, and could also be recognized by phrases similar to “estimates”, “expect,” “anticipate,” “will,” “implied,” “assume” and comparable expressions. Forward trying statements are topic to sure dangers, tendencies and uncertainties that would trigger precise outcomes and
achievements to differ materially from these expressed in such ahead trying statements. Such dangers, tendencies and uncertainties, which in some situations are past Gray’s management, embody Gray’s incapacity to full its pending acquisition of Raycom, on the phrases and throughout the timeframe at the moment contemplated, any materials regulatory or different surprising necessities in connection therewith, or the shortcoming to obtain anticipated synergies therefrom on a well timed foundation or in any respect, the
impression of not too long ago accomplished transactions, estimates of future retransmission income, future bills and different future occasions. Gray is topic to further dangers and uncertainties described in
Gray’s quarterly and annual reviews filed with the Securities and Exchange Commission from time to time, together with in the “Risk Factors,” and administration’s dialogue and evaluation of monetary
situation and outcomes of operations sections contained therein, which reviews are made publicly out there through its web site, www.grey.television. Any forward-looking statements in this presentation needs to be evaluated in mild of these essential threat components. This presentation displays administration’s views as of the date hereof. Except to the extent required by relevant regulation, Gray undertakes no obligation
to replace or revise any data contained in this presentation past the revealed date, whether or not consequently of new data, future occasions or in any other case.



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