NEW YORK & LOS ANGELES - MediaCo Holding Inc. (NASDAQ:MDIA), known for its urban radio stations HOT 97 and WBLS 107.5, has acquired Estrella Media's network and digital operations, including EstrellaTV and its associated FAST channels and app. The transaction, which closed on April 17, 2024, expands MediaCo's Spanish-language content offerings and positions it as a substantial multicultural media platform in the United States.
The acquisition brings together MediaCo's urban music content with Estrella Media's Spanish-language video, audio, and digital content. Estrella Media's notable assets include EstrellaTV, Estrella News, Cine EstrellaTV, Estrella Games, and the EstrellaTV app. Additionally, MediaCo will now reach audiences of Estrella Media's leading regional Mexican radio stations, such as Que Buena Los Angeles and La Raza in Houston and Dallas.
Jacqueline Hernández, with her extensive experience in Hispanic media, has been appointed as the Interim CEO of MediaCo. Hernández has served as CEO of New Majority Ready, COO at Telemundo, and CMO at NBCUniversal Hispanic Enterprises. This leadership change aims to drive content growth and distribution to serve the multicultural audience effectively.
MediaCo and Estrella Media's combination is expected to leverage the strengths of both entities to create a media company that caters to a diverse U.S. audience. The deal does not include Estrella Media's local radio and television stations, which it will continue to own and operate. However, MediaCo has an option to acquire these stations in the future, subject to regulatory approval.
In terms of the transaction's financials, Estrella Broadcasting is receiving a warrant to purchase MediaCo Class A Common Stock, shares of MediaCo Series B Preferred Stock, a second lien term note, and approximately $30 million in cash. WhiteHawk Capital Partners provided a term loan facility to MediaCo for the transaction.
The deal's approval came from the boards of directors of both MediaCo and Estrella Broadcasting. Legal and financial advisors were involved from both sides to facilitate the transaction.
This news article is based on a press release statement.
InvestingPro Insights
The recent acquisition by MediaCo Holding Inc. (NASDAQ:MDIA) of Estrella Media's network and digital operations marks a significant expansion of its media offerings. As MediaCo steps into this new chapter, investors are keeping a close eye on the company's financial health and stock performance. According to InvestingPro data, MediaCo has a market capitalization of $70.74 million and has experienced a notable price volatility, with the stock taking a significant hit over the past week, declining by 25.68%. This aligns with the InvestingPro Tip that MediaCo's stock generally trades with high price volatility.
Despite facing challenges such as weak gross profit margins, as indicated by a -0.75% gross profit margin for the last twelve months as of Q4 2023, MediaCo has shown strong returns over various periods. The stock has surged with a 423.08% return over the last month and a 110.85% return over the past year. Additionally, MediaCo's liquid assets exceed its short-term obligations, suggesting a stable financial position in terms of liquidity.
Investors interested in a deeper analysis can find more InvestingPro Tips for MediaCo, which include observations on the company's moderate level of debt, its lack of profitability over the last twelve months, and its performance over different time frames. With a total of 11 InvestingPro Tips available, investors can gain a comprehensive understanding of MediaCo's financial situation and stock behavior. To explore these insights further, visit https://www.investing.com/pro/MDIA and remember to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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