Home / Business and Economy / Gray TV Secures $70M for Acquisitions
Gray TV Secures $70M for Acquisitions
2 Jul
Summary
- Gray Television raised $70 million via secured notes.
- Funds will acquire six TV stations and repurchase preferred stock.
- Transactions are expected to increase cash flow without raising leverage.
Gray Television, a local media company, announced it had raised $70 million through a private offering of 7.250% Senior Secured First Lien Notes. The company's stock experienced a significant jump in afternoon trading following this announcement. This capital infusion is intended for strategic financial maneuvers.
A substantial portion of the funds, $40 million, will facilitate the initial payment for acquiring six television stations from American Spirit Media for a total of $50 million. An additional $30 million is allocated to repurchase shares of its Series A Preferred Stock.
Gray Television anticipates that these transactions will enhance its cash flow generation capabilities. Crucially, the company emphasized that these moves will not increase its leverage ratio, a factor that appeared to resonate positively with investors. The stock price saw an initial surge of 2.8% before settling slightly higher.
Despite past volatility, including significant stock movements over the last year, the market's reaction suggests this news is considered meaningful. Analysts have previously cited Gray's revitalized balance sheet and accretive acquisitions, with some significantly raising price targets. The company's stock is currently trading below its 52-week high, reflecting a year-to-date decrease.
