McGraw Hill Sells Broadcasting Unit to EW Scripps for $212 Million

October 04 00:00 2011

New York, October 4 ( – Having put up its nine-station broadcasting unit for sale in June, McGraw-Hill Cos Inc, owner of Standard & Poor’s credit-rating agency, has finalized a deal to sell the unit to media conglomerate EW Scripps Co for $212 million in cash.

Chief Executive Harold McGraw said in a statement on Monday that “this divestiture will produce good value for a non-strategic asset as we work to create two focused operating companies, one centered on capital and commodities markets and the other on digital learning and education services.”

The revenues of the stations, which include Disney’s ABC, were $97 million in 2010. Reliable sources have revealed that the purchase price was 10 times cash flow but this figure could not be immediately confirmed. Stock analyst Peter Appert Jaffray & Co said in an email that the important aspect for investors “will be the multiple of earnings they were sold for, which we don’t have yet.”
Appert added that the company has owned the stations for many years and that McGraw-Hill did not reveal how much it expects to gain from the transaction after taxes.

Morgan Stanley was the financial adviser for McGraw-Hill in its deal with Scripps. Shares of McGraw-Hill closed at $39.94 and those of Scripps closed at $6.74 on Monday on the New York Stock Exchange.