Atlanta-based Cumulus Media Inc. said Monday it has agreed to buy out its partners in a venture that owns 32 radio stations in nine cities, including three in Indianapolis.
Cumulus already owned 25 percent of Cumulus Media Partners LLC; it will acquire the remaining interests from three private equity firms—Bain Capital Partners LLC, The Blackstone Group L.P. and Thomas H. Lee Partners—in exchange for stock worth about $740 million.
In 2005, the partnership paid $1.2 billion for Pennsylvania-based Susquehanna Radio Corp., which owned stations in Indianapolis, San Francisco, Dallas, Houston, Atlanta, Cincinnati and Kansas City. Cumulus Media, the second-largest radio broadcaster in the country, has been operating the stations under a management agreement ever since.
Cumulus Media Partners “has long been one of the most coveted sets of assets in the radio industry and we expect it will immediately become an important driver of growth and profitability for the company," Cumulus Chairman and CEO Lew Dickey said in a prepared statement.
Among the potential benefits of consolidating the operations, he said: increased revenue and profit, a more diversified and strategic national media platform, and a stronger capital base to position the company for strategic acquisitions.
“It is not a major change for us,” said Chris Wheat, market manager for Cumulus Indianapolis, which includes country music powerhouse WFMS-FM 95.5, classic hits WJJK-FM 104.5 and Top 40 WRWM-FM 93.9. “It’s an opportunity to get total control and use the giant media company—eventually—as leverage for other purchases.”
The transaction, which is subject to standard shareholder and regulatory approval, is expected to close during the second quarter.