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Sometimes big deals start with a simple phone call.
In November, Caroline Beasley called Peter Smyth, chairman and CEO of Massachusetts-based Greater Media, a privately held radio operator owned by the Bordes family since 1956.
Beasley, interim CEO of Beasley Broadcast Group, sought an acquisition that would boost the scale of the Naples-based company. “I just picked up the phone,” she says, smiling.
“Peter's very well respected and known in the industry.”
Eight months later, Beasley announced it would acquire Greater Media for about $240 million in cash, stock and debt. When it closes later this year, the deal will propel Beasley onto the list of the Top 10 radio broadcast companies in the U.S. by revenues, with a combined 73 stations in 16 markets.
Based on 2015 financial results, the acquisition would push Beasley's annual net revenues from $106 million to $247 million. “It puts us in a different position,” says Beasley. “In today's competitive environment, it seems like scale is very important.”
For starters, national advertisers that target audiences from Boston to Naples will notice the company's Top 10 status. “We're invited to the dance,” Beasley says. “We have the eastern seaboard if you want to get it.”
The company, in the acquisition, will also save on duplicative costs of back-office operations. Within a year of completing the acquisition, Beasley estimates it will save $7 million in such costs.
What's more, the deal diversifies the company's revenues so it's not dependent on a handful of markets. Already, a deal to swap stations with CBS Radio in 2014 diversified the company's revenues with the addition of 14 stations. The Greater Media acquisition gives the company a foothold in new markets in the Northeast, such as New Jersey.
Besides increasing Beasley's profile as a major corporate headquarters company in Naples, Southwest Florida may benefit from the acquisition in other ways, too. “We've actually hired a few new [corporate] positions for our company,” says Beasley, whose stations cover Southwest Florida and the Tampa Bay region. (Beasley Broadcast Group is the corporate parent of Beasley Media Group, which operates the stations.)
Culturally, the companies are a good fit, too. Greater Media has been in business since 1956, when the Bordes family founded the firm. Meanwhile, the Beasley family has run Beasley Broadcast since Chairman and CEO George Beasley founded it in 1961.
Caroline Beasley is George Beasley's daughter. She was named interim CEO in March, while her father recuperates from an undisclosed illness. She's also the firm's CFO and an executive vice president.
Caroline Beasley's brothers, Brian Beasley and Bruce Beasley, are also top executives at the company. They will manage the integration with Greater Media. “It's up to them to go and make it happen,” Caroline Beasley says.
Shareholders responded positively to the Greater Media deal by bidding up the company's publicly traded stock (symbol: BBGI) 19% in the days after the announcement of the acquisition. For the year to date through Aug. 1, the company's shares are up 56%. “The transaction is immediately accretive to shareholders,” Beasley says.
The deal to buy Greater Media includes $100 million in cash, $25 million in stock, $20 million from the sale of radio towers, $80 million of debt and about $15 million in other acquisition-related costs.
“We're not taking on too much debt,” says Caroline Beasley, who notes the company will continue its strategy to reduce debt and pay dividends to shareholders.
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