Forstmann Little & Co. this month has agreed to acquire Citadel Communications Corp., an owner of radio stations in mid-sized markets throughout the U.S., for approximately $2 billion, which includes cash and assumed and refinanced debt.
Forstmann Little will invest $1.5 billion of equity and affiliates of J.P. Morgan Chase & Co. have agreed to provide $500 million of bank financing. The transaction is expected to be completed in the second half of 2001. Credit Suisse First Boston served as financial adviser to the company.
“Citadel Communications stands out as a leader in the radio broadcasting industry, with a great management team and excellent execution,” said Senior Partner Theodore Forstmann. Forstmann also said in an interview that Citadel Communications “couldn’t get a lot bigger as a public company.”
Las Vegas-based Citadel Communications is a holding company through which its subsidiaries own and operate radio stations. Upon completion of the transaction, Citadel Communications will own or operate 209 stations in 44 mid-sized markets in the U.S. The company had revenue of $192.5 million last year.
“Forstmann Little’s investment will provide us with the capital we need to support our stations and pursue our growth strategy, as well as serve our audiences and the local communities in which we operate,” said Lawrence Wilson, chief executive officer of Citadel Communications.