Scripps said the purchase would be immediately accretive to revenue growth, margins and cash flow, and is expected to generate $ 500 million in synergies over the next six years. The combination will create a powerhouse of network, cable and cross-platform media.
The deal will be funded with $ 300 million in cash and $ 1.85 billion in debt. Berkshire will make a $ 600 million preferred stock investment in Scripps to help fund the purchase of private ION. Berkshire will also receive a warrant to purchase up to 23.1 million Class A Scripps shares, with an exercise price of $ 13 each.
Scripps operates a portfolio of 60 TV channels, as well as a growing list of broadcast networks, including Court TV, Bounce and Laff. The company also operates the cross-platform news provider Newsy.
For its part, ION Media is the only independent national broadcast network, reaching more than 100 million households in the United States and approximately 96% of the population. The company has 71 owned and operated stations, with a range of popular syndicated programs, including staples like Law and order, Criminal Minds, NCIS: Los Angeles, Blue blood, and Chicago PD, among others. ION consistently ranks in the top 10 for network and cable audiences, but only 25th for ad revenue, providing a path for immediate financial improvement.
Scripps investors cheered the news, pushing the stock up more than 7%.