Meredith Closes Phoenix Acquisitions, Reiterates Outlook - Analyst Blog

Meredith Corporation MDP recently closed the acquisition of two television stations from Gannett Co., Inc. GCI and Sander Media LLC in Phoenix, one of the largest television markets in the U.S. However, the $230.0-million-deal will not have any material impact on Meredith's fourth-quarter fiscal 2014 results.

The acquired stations include KTVK-TV, an independent station in Phoenix and KASW-TV, the CW affiliate in Phoenix. These stations form part of Gannett's Belo Corp. acquisition.

Alongside, third-party purchaser SagamoreHill of Phoenix bought certain assets of KASW. Both SagamoreHill and Meredith have mutually agreed to divest KASW via a swap deal, cash transaction or a blend of the two as part of the Federal Communications Commission approval for the deal.

Further, Meredith announced that it entered a deal to buy assets of WGGB-TV, which is an ABC affiliate in Springfield. This deal with Gormally Broadcasting LLC, worth $53.8 million, is expected to close during the third quarter of 2014.

Concurrent with this press release, Meredith re-affirmed its fiscal 2014 outlook. This Zacks Rank #2 (Buy) company continues to envision fiscal 2014 earnings in the band of $2.6–$2.95 per share, and range around the mid-point. For fourth-quarter fiscal 2014, the company anticipates earnings within 81–86 cents a share, up from 75 cents reported last year.

The acquisitions are the latest among several other strategic purchases made by Meredith. The company, which competes with Martha Stewart Living Omnimedia Inc. MSO, had earlier added Allrecipes.com, Every Day with Rachael Ray, FamilyFun, EatingWell, Parenting and BabyTalk to its portfolio.

These acquisitions form a part of Meredith's Total Shareholder Return (TSR) strategy that was initiated in Oct 25, 2011. These have already aided its revenues and cash flows, and are further expected to augment the company's earnings.

Another stock in the industry, which looks impressive at current levels, includes Reed Elsevier plc RUK that carries the same Zacks Rank as Meredith.

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