NEW YORK TIMES GROUP GOES FOR $575 MILLION

Buyer of nine-station TV group is Oak Hill Capital Partners, private equity firm founded by billionaire investor Robert M. Bass. One broker not involved in the deal pegs the cash-flow multiple at 12.7.
By
TVNewsCheck,

The New York Times Co. announced this afternoon that it has struck a deal to sell its nine-station TV group to Oak Hill Capital Partners, a private equity firm, for the $575 million.


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The Times group comprises nine network-affiliated stations in eight markets:

WTKR Norfolk, Va. (CBS)—DMA 42

WREG Memphis (CBS)—DMA 44

KFOR Oklahoma City (NBC)—DMA 46

KAUT Oklahoma City (MNT)—DMA 46

WNEP Scranton, Pa. (ABC)—DMA 53

WHO Des Moines, Iowa (NBC)—DMA 73

WHNT Huntsville, Ala. (CBS)—DMA 84

WQAD Moline, Ill. (ABC)—DMA 96

KFSM Ft. Smith, Ark. (CBS)—DMA 102

That the buyer is a private equity firm will surprise no one. Consortiums of such investment groups emerged as the buyers in the two largest deals of 2006, Univision and Clear Channel Communications.

Oak Hill Capital Partners traces its roots to Robert M. Bass, the billionaire investor based in Fort Worth, Texas.

In the 1980s, Bass formed an independent firm to invest his private equity capital. From 1986 to 1998, the firm directed more than 26 transactions, representing investments of more than $1.2 billion of equity capital.

In 1999, with Bass as the lead investor, the firm launched Oak Hill Capital Partners, L.P., which became the successor vehicle for all of the firm's private equity activity. This fund was formed with $1.6 billion in capital commitments and invested in 18 portfolio companies. In 2005, Oak Hill closed Oak Hill Capital Partners II, L.P. with $2.5 billion in capital commitments.

According to a 2005 Business Week story, investors in Partners II include Bill Gates and Phil Knight, the founder and chairman of Nike. Gates contributed $70 million; Knight, $200 million.

The managing partners are J. Taylor Crandall, Steven B. Gruber, Denis J. Nayden and Mark A. Wolfson. None has broadcasting in his background.

According to the firm's Web site, it has no other broadcast properties, but its portfolio does include three small cable operators—Wometco Cable Corp.; WideOpenWest and Atlantic Broadband Group—and a telephone company, Cincinnati Bell.

Goldman, Sachs & Co. advised the New York Times Co. on the sale.

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