Providence to buy Clear Channel division for $1.2bn

Clear Channel is selling a group of 54 television stations to Providence Equity Partners for $1.2 billion. The media giant is also in agreements to sell 161 radio stations for $331 million.

Clear Channel Communications has agreed to sell its Television Group unit to Providence Equity Partners for $1.2 billion (€883 million). The division includes 56 television stations in 24 US markets.

Expected to close in the fourth quarter of 2007, the deal is subject to regulatory approvals and customary closing conditions.

The proposed sale includes websites associated with the stations, as well as the group’s TV operations center and Inergize Digital Media, a Clear Channel division focused on helping stations transition from traditional analog to new digital technology and integrate the web into daily operations.

“This is a rare opportunity to acquire a premier collection of broadcast television stations with strong positions in many attractive markets across the United States,” Al Dobron, a managing director of Providence Equity, said in a statement.

The transaction’s value is more than double the size of a similar deal recently done by Oak Hill Capital Partners. In January, the Robert Bass-affiliated firm agreed to pay $575 million for nine TV stations owned by The New York Times Company. Cerberus Capital Management also recently purchased seven TV stations from CBS for $185 million.

Providence, which is headquartered in Providence, Rhode Island, closed its sixth fund in February on $12 billion. 
Clear Channel – whose shareholders will soon vote on a $27 billion buyout led by Thomas H. Lee Partners and Bain Capital – also said it has “entered definitive agreements” to sell 161 radio stations in 34 markets for $331 million, but did not name the buyers. Those deals are expected to close during the second half of 2007.

The company will continue to shop 287 radio stations in 54 markets, pursuant to a prior announcement. Those stations had OIBDAN (defined as “operating income before depreciation and amortization, non-cash compensation expense and gain on disposition of assets – net”) of approximately $54 million in 2006.