Deal Creates Scale and Reach Across the
U.S., with a Nationwide Footprint of 244 Stations, Including 23 of
the Top 25 Markets
Entercom Communications Corp. (NYSE:ETM) and CBS Corporation
(NYSE:CBS.A and CBS) today announced that the companies have
entered into an agreement by which Entercom will combine with CBS
Radio in a tax-free merger. The transaction will create a
preeminent radio platform, with a nationwide footprint of 244
stations, including 23 of the top 25 U.S. markets, as well as
robust digital capabilities and a growing events platform.
This Smart News Release features multimedia.
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“This agreement is great for shareholders and achieves our
previously stated objectives by separating our radio business in
the best possible way,” said Leslie Moonves, Chairman and Chief
Executive Officer, CBS Corporation. “Entercom is a superbly run
company, and together with CBS Radio’s powerful brands and
remarkable people, we are creating an organization that will be
even better positioned to succeed in this rapidly evolving media
landscape.”
David J. Field, President and CEO of Entercom, who will lead the
combined company, said, “These two great companies, with their
impressive histories, complementary assets, and premier content and
brands, are a perfect strategic and cultural fit, enabling us to
deliver local connection on a national scale and drive accelerated
growth. We look forward to welcoming our talented new colleagues at
CBS Radio, and we have the utmost respect for their significant
contributions to the industry.”
Mr. Field continued, “Radio reaches more Americans than any
other medium, and offers advertisers outstanding ROI and local
activation. This transformational transaction creates scale-driven
efficiencies and opportunities to compete more effectively with
other media to better serve our listeners and our advertisers. The
combination of a compelling strategic fit, an excellent balance
sheet, and robust free cash flow generation, position us to create
significant shareholder value for our investors.”
Andre Fernandez, who will continue as President and CEO of CBS
Radio through the closing of the transaction, said, “I couldn’t be
more proud of the CBS Radio team and all of the exciting breaking
news, live events, and business initiatives happening every day
across the country. Today marks the beginning of a new chapter for
us as we join with an organization with an equally deep tradition
in radio broadcasting. The opportunities for the new company are
enormous – thanks to our combined collection of industry-leading
stations and brands.”
The merger will create a leading local media and entertainment
company with strong, complementary assets on a national scale,
including:
- A leading sports platform with the
rights to broadcast 45 pro sports teams, including the New York
Yankees, the Boston Red Sox, the Chicago Cubs, the New England
Patriots, the Atlanta Falcons, and the Golden State Warriors, and
100+ popular local sports talk shows, including the
most-listened-to sports talk station in the country, as well as the
CBS Sports Radio Network, which is made up of 300 affiliated radio
stations across the country
- Leadership in news and news/talk
format, with some of the most-listened-to news and talk radio
stations nationwide, including 1010 WINS in NY, KNX in LA, and WBBM
in Chicago
- A diverse array of music and
entertainment formats with popular personalities who are leading
influencers of custom curated music and entertainment experiences
that drive music discovery
- A leading creator of more than 4,500
live original events per year, from music festivals and large shows
to intimate performances with big-name artists
- A growing portfolio of digital content
that expands reach and engagement by local on-air talent through
original programming and social media
- The ability to monetize the
intellectual property of dozens of major-market radio shows across
multiple emerging platforms
- Legendary local stations with rich
heritage and well-known call letters, which will remain after the
transaction
Transaction Details
The combined companies’ pro forma revenue on a trailing 12
months basis was approximately $1.7 billion – which would make it
the second-largest radio station owner in the U.S. – and adjusted
EBITDA was nearly $500 million, including expected transaction
synergies. With pro forma leverage of approximately 4.0x net
debt/Adjusted EBITDA, the merger will create a well-capitalized
company with a market cap of over $2 billion, a strong balance
sheet, significant free cash flow generation, and an attractive
dividend, positioned to drive shareholder value.
The combination of CBS Corporation’s radio business with
Entercom will be effected through a “Reverse Morris Trust”
transaction, which is expected to be tax-free to CBS and its
shareholders. As part of the transaction, CBS shareholders will
have the opportunity to exchange all, some, or none of their CBS
shares for CBS Radio shares. Immediately following the completion
of this exchange offer, CBS Radio will merge with an Entercom
subsidiary, with the new CBS Radio shareholders receiving Entercom
shares in exchange for their CBS Radio shares in the transaction.
After completion of the merger, CBS Radio shareholders will receive
approximately 105 million Entercom shares, or 72% of all
outstanding shares of the combined company on a fully diluted
basis. Existing Entercom shareholders will own 28% of the combined
company on a fully diluted basis.
The transaction is subject to approval by Entercom shareholders.
Entercom Chairman Joseph M. Field, a controlling shareholder of
Entercom, has agreed to vote in favor of the transaction.
The transaction is expected to close during the second half of
2017, subject to certain regulatory approvals and other customary
closing conditions.
Governance & Structure
The combined company will be known as Entercom and will be
headquartered in Philadelphia, with a significant ongoing presence
in New York. Upon closing, the company’s Board of Directors will
consist of nine members: five current Entercom directors, including
David Field as Chairman of the Board, and four directors nominated
by CBS Radio.
Conference Call
Entercom will host a conference call at 8:30 AM ET today.
Following the prepared remarks, the call will include a
question-and-answer session with the investment community. Domestic
and international participants may access the conference call
toll-free by dialing 888-889-0278 and 312-470-7046, respectively,
and using the pass code “Entercom.” A replay of the conference call
will be available and can be accessed either by dialing
866-451-8996 (domestic) or 203-369-1206 (international) or on
Entercom’s website at www.entercom.com under the investor tab.
A copy of the investor presentation will be made available on
Entercom’s investor relations page at www.entercom.com.
Advisors
Morgan Stanley & Co. LLC and Centerview Partners are serving
as financial advisors, and Latham & Watkins LLP is serving as
legal counsel to Entercom. Goldman, Sachs & Co. is serving as
financial advisor, and Wachtell, Lipton, Rosen & Katz is
serving as legal counsel to CBS Corporation.
Forward-Looking Statements
This press release contains certain statements about Entercom
Communications (“Entercom”), CBS Corporation (“CBS”) and CBS Radio
Inc. (“CBS Radio”) that are “forward-looking statements” within the
meaning of Section 27A of the United States Securities Act of 1933,
as amended, and Section 21E of the United States Securities
Exchange Act of 1934, as amended. These matters involve risks and
uncertainties as discussed in Entercom’s and CBS’s respective
periodic reports on Form 10-K and Form 10-Q and current
reports on Form 8-K, filed from time to time with the
Securities and Exchange Commission (“SEC”). The forward-looking
statements contained in this press release may include statements
about the expected effects on Entercom, CBS and CBS Radio of the
proposed separation of CBS’s radio business and merger of CBS Radio
with an Entercom subsidiary (collectively, the “Transaction”); the
anticipated timing and benefits of the Transaction and Entercom’s,
CBS’s and CBS Radio’s anticipated financial results; and also
include all other statements in this press release that are not
historical facts. Without limitation, any statements preceded or
followed by or that include the words “targets,” “plans,”
“believes,” “expects,” “intends,” “will,” “likely,” “may,”
“anticipates,” “estimates,” “projects,” “should,” “would,” “could,”
“positioned,” “strategy,” “future,” or words, phrases, or terms of
similar substance or the negative thereof, are forward-looking
statements. These statements are based on the current expectations
of the management of Entercom, CBS and CBS Radio, (as the case may
be) and are subject to uncertainty and to changes in circumstances
and involve risks and uncertainties that could cause actual results
to differ materially from those expressed or implied in such
forward-looking statements. In addition, these statements are based
on a number of assumptions that are subject to change. Such risks,
uncertainties and assumptions include: the satisfaction of the
conditions to the Transaction and other risks related to the
completion of the Transaction and actions related thereto;
Entercom’s and CBS’s ability to complete the Transaction on the
anticipated terms and schedule, including the ability to obtain
shareholder and regulatory approvals and the anticipated tax
treatment of the Transaction and related transactions; the ability
to obtain financing or refinancing related to the Transaction upon
acceptable terms or at all; risks relating to any unforeseen
liabilities, future capital expenditures, revenues, expenses,
earnings, synergies, economic performance, indebtedness, financial
condition, losses, and future prospects; business and management
strategies and the expansion and growth of Entercom’s operations;
volatile price or trading volume of Entercom’s common stock;
failure to pay dividends to holders of Entercom’s common stock;
impairment charges for FCC licenses and goodwill; Entercom’s
ability to integrate CBS’s radio business successfully after the
closing of the Transaction and to achieve anticipated synergies;
and the risk that disruptions from the Transaction will harm
Entercom’s or CBS’s businesses. However, it is not possible to
predict or identify all such factors. Consequently, while the list
of factors presented here is considered representative, no such
list should be considered to be a complete statement of all
potential risks and uncertainties. Unlisted factors may present
significant additional obstacles to the realization of
forward-looking statements. Forward-looking statements included
herein are made as of the date hereof, and neither Entercom nor CBS
undertakes any obligation to update publicly such statements to
reflect subsequent events or circumstances.
Additional Information and Where to Find It
This press release does not constitute an offer to buy, or
solicitation of an offer to sell, any securities of Entercom, CBS
or CBS Radio. In connection with the Transaction, Entercom
will file with the SEC a registration statement on Form S-4
that will include a proxy statement and prospectus of Entercom
relating to the Transaction; CBS will file with the SEC a Schedule
TO with respect to the proposed exchange offer; and CBS Radio will
file with the SEC a registration statement on Form S-1, Form S-4
and/or Form 10 that will include a prospectus of CBS Radio relating
to the proposed exchange offer. INVESTORS AND SECURITY HOLDERS ARE
URGED TO READ THESE DOCUMENTS, AND ANY OTHER RELEVANT DOCUMENTS,
WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT ENTERCOM, CBS, CBS RADIO, AND THE TRANSACTION.
Investors and security holders will be able to obtain these
materials (when they are available) and other documents filed with
the SEC free of charge at the SEC’s website, www.sec.gov. In
addition, copies of these materials (when they become available)
may be obtained free of charge by accessing CBS’s website at
www.cbscorporation.com, or from Entercom by accessing Entercom’s
website at www.entercom.com. Shareholders may also read and copy
any reports, statements and other information filed by Entercom or
CBS with the SEC, at the SEC public reference room at 100 F Street,
N.E., Washington D.C. 20549. Please call the SEC at 1-800-SEC-0330
or visit the SEC’s website for further information on its public
reference room.
Participants in the Solicitation
Entercom, CBS and certain of their respective directors,
executive officers and other members of management and employees
may be deemed to be participants in the solicitation of proxies
from shareholders in respect of the Transaction under the
rules of the SEC. Information regarding Entercom’s directors
and executive officers is available in its Annual Report on
Form 10-K filed with the SEC on February 26, 2016, and in
its definitive proxy statement filed with the SEC on March 18,
2016, in connection with its 2016 annual meeting of stockholders.
Information regarding CBS’s directors and executive officers is
available in its Annual Report on Form 10-K filed with the SEC
on February 16, 2016, and in its definitive proxy statement
filed with the SEC on April 15, 2016, in connection with its
2016 annual meeting of stockholders. Other information regarding
the participants in the proxy solicitation and a description of
their direct and indirect interests, by security holdings or
otherwise, will be contained in the registration statement and
proxy statement/prospectus and other relevant materials to be filed
with the SEC when they become available.
About CBS Corporation
CBS Corporation (NYSE: CBS.A and CBS) is a mass media company
that creates and distributes industry-leading content across a
variety of platforms to audiences around the world. CBS has
businesses with origins that date back to the dawn of the
broadcasting age as well as new ventures that operate on the
leading edge of media. CBS owns the most-watched television network
in the U.S. and one of the world’s largest libraries of
entertainment content, making its brand — “the Eye” — one of the
most recognized in business. CBS’s operations span virtually every
field of media and entertainment, including cable, publishing,
radio, local TV, film, and interactive and socially responsible
media. CBS’s businesses include CBS Television Network, The CW (a
joint venture between CBS Corporation and Warner Bros.
Entertainment), CBS Television Studios, CBS Studios International,
CBS Television Distribution, CBS Consumer Products, CBS Home
Entertainment, CBS Interactive, CBS Films, Showtime Networks, CBS
Sports Network, Pop (a joint venture between CBS Corporation and
Lionsgate), Smithsonian Networks, Simon & Schuster, CBS
Television Stations, CBS Radio and CBS EcoMedia. For more
information, go to www.cbscorporation.com.
About CBS Radio
CBS RADIO is one of the largest major-market broadcast media
operators in the United States and the undisputed leader in news
and sports radio. CBS RADIO produces original audio and video
content, live events and exclusive programming distributed on-air,
online and on mobile platforms. A division of CBS Corporation, CBS
RADIO owns 117 radio stations in 26 markets – including all of the
top 10 radio markets as ranked by Nielsen Audio – as well as an
extensive array of digital assets. CBS RADIO distributes its
programming via AM, FM and HD Radio stations, Radio.com and CBS
Local Digital Media apps, making engaging with audiences easier
than ever before. For more information on CBS RADIO, please
visit www.cbsradio.com.
About Entercom Communications Corp.
Entercom Communications Corp. (NYSE: ETM) is the fourth-largest
radio broadcasting company in the U.S., reaching and engaging more
than 40 million people a week through its 127 highly rated stations
in 27 top markets across the country. Entercom is a purpose-driven
company, deeply committed to entertaining and informing its
listeners with the best locally curated music, news, sports, and
talk content, driven by compelling local personalities. Entercom
delivers superior ROI by connecting its customers and audiences
through its leading local brands and unparalleled local marketing
solutions, which include over 4,000 events each year, and its
SmartReach Digital product suite. Learn more about
Philadelphia-based Entercom at www.Entercom.com, Facebook and
Twitter (@Entercom).
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version on businesswire.com: http://www.businesswire.com/news/home/20170202005553/en/
ENTERCOMPress:Sard Verbinnen & Co.Bryan
Locke/Jenny Gore/Jacob Crows312-895-4700orEntercomEsther-Mireya
Tejeda,
610-822-0861Esther-Mireya.Tejeda@entercom.comorInvestors:EntercomSteve
Fisher, 610-660-5647Executive Vice President and
CFOsfisher@entercom.comorCBSPress:CBS CorporationDana
McClintock, 212-975-1077dlmcclintock@cbs.comorCBS RadioJaime
Saberito,
212-649-9639jaime.saberito@cbsradio.comorInvestors:CBS
Investor RelationsAdam Townsend,
212-975-5292adam.townsend@cbs.comorDavid Bank,
212-975-6106david.bank@cbs.com
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