Meredith Buys TV Stations in Phoenix, St. Louis for $407.5 Million

The seller is Gannett Co., which is satisfying one of the conditions for its purchase of Belo Corp.

Meredith Corp. has announced it is buying TV stations from Gannett Co. and Sander Media.

The $407.5 million acquisition includes KASW, a CW affiliate in Phoenix, and KMOV, the CBS affiliate in St. Louis. The deal will need to gain approval from FCC regulators examining local television ownership rules.

Meredith is also purchasing KTVK, an independent station in Phoenix, but flipping it in a separate deal to SagamoreHill.

"These are high-performing stations and will add to our already strong cash flow," said Meredith CEO Stephen Lacy. "We will increase our presence in the large and growing Phoenix market, where we own KPHO, the CBS affiliate. KMOV (CBS) in St. Louis adds another Top 25 market to our portfolio, and when combined with KCTV (CBS) in Kansas City, gives us powerful local brands in two of the Midwest's top news and sports markets."

The deal is expected to close sometime in the first half of 2014. According to Meredith, the stations are expected to generate combined revenues of $105 million to $115 million in the year after closing the deal.

Gannett got KMOV as part of its $1.5 billion deal to acquire Belo Corp. but agreed to sell it as part of a consent decree reached with the U.S. Department of Justice. Late last week, the FCC approved the Gannett/Belo deal. In a statement announcing the Meredith deal, Gannett highlights the reward.

Gracia Martore, chief executive of Gannett, said, "These sales will significantly lower the effective purchase price for Belo while reducing only minimally the expected synergies associated with the Belo transaction, which we expect to close promptly."