Posts Tagged ‘WRRN’

Evine Sells Boston TV Station For $13.5 Million

September 4, 2017

Bet you didn’t know that Evine owned a TV station. Well, it won’t for much longer.

Last week the home shopping network announced that it was selling WWDP in Boston for an aggregate of $13.5 million in a series of two transactions.

“This deal further strengthens our balance sheet and gives us additional flexibility to grow our digital commerce company,” Evine CEO Bob Rosenblatt said in a canned statement.

“After reducing our high-interest debt by $9.5 million in the first half of the year, this sale of a non-strategic asset allows us to retire the remaining $6.2 million of high-interest debt and deploy the remaining cash for initiatives we choose with the highest expected shareholder return.”

The deal includes two agreements with unrelated parties and is expected to close in the fourth quarter or first quarter of next year following satisfaction of customary closing conditions, including Federal Communications Commission approval.

Curiously enough, Evine’s press release didn’t say who was buying the TV station. We had to go to the company’s 8-K to find that. Looks like it was WRRN.

Here it is:

On August 28, 2017, we entered into a Channel Sharing and Facilities Agreement (the “Channel Sharing Agreement”) with NRJ Boston OpCo, LLC and NRJ TV Boston License Co., LLC (collectively, “ NRJ ”) to allow NRJ to operate its local Boston television station on one-third of the spectrum used in the operation of the Station in perpetuity.

The total consideration payable to our company under the Channel Sharing Agreement is $3.5 million, with $2.5 million being payable upon grant of a required construction permit by the Federal Communications Commission and the balance being payable upon the closing of a sale of substantially all of the assets used by us in the operation of the Station or the transfer of the equipment necessary for channel sharing among our company and NRJ to a newly formed entity.

On August 28, 2017, we also agreed to sell substantially all of the assets primarily related to the Station to affiliates of WRNN-TV Associates Limited Partnership (“ Buyers”) pursuant to an Asset Purchase Agreement.

The purchase price for the Station’s assets is $10.0 million in cash, subject to an escrow hold-back of $1.0 million, which is payable to our company when the Station is being carried by certain designated carriers at or following the closing of the transaction.

The escrow hold-back is payable back to the Buyers in monthly installments beginning approximately 14 months after the closing if the Station is not being carried by certain designated carriers.

The purchase agreement includes customary representations, warranties, covenants and indemnification obligations of the parties. The sale of assets pursuant to the purchase agreement is expected to close in the fourth quarter of fiscal 2017 or the first quarter of fiscal 2018 following receipt of specified regulatory approvals from the FCC and satisfaction of the other closing conditions in the purchase agreement.

We plan to use the proceeds received from the transactions to pay in full the remaining amounts due under our term loan with GACP Finance Co., LLC, with the remaining proceeds used for general working capital purposes.

The closing of the transactions are expected to have a $3.5 million to $4.5 million nonrecurring benefit to our net income that may be spread over multiple quarters in fiscal 2017 and fiscal 2018, which includes the reversal of a deferred tax liability, the recognition of a potential gain on the sale of the Station assets and the subsequent extinguishment of high-interest debt.

According to the press release, “The financial impact of this transaction is expected to cross multiple quarters and is contingent on the timing of the close and completion of certain transaction related contingencies.”

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