IT'S OFFICIAL: SUSQUEHANNA ON THE BLOCK Tony Sanders – Billboard Another long-time member of radio’s “old guard” is on the block. Susquehanna Radio (now Susquehanna Media) built its first station, WSBA York, Penn., in 1942, with funding from the Pfaltzgraff Pottery Company, the parent corporation that still owns that AM and 32 other stations in eight markets.
Susquehanna Media, which now owns cable and radio properties, said it “intends to explore a sale of its major subsidiaries” including the parent, The Pfaltzgraff Co.
Pfaltzgraff is the oldest continuously operating pottery manufacturing company in the U.S. Sources at Susquehanna told Billboard Radio Monitor that overseas competition has been a heavy burden for the pottery firm. “It’s China that’s hurting Pfaltzgraff,” said this source, suggesting that dinnerware and pottery made in China and shipped to the U.S. has pushed down profits and revenues at the U.S. firm.
"This has been a difficult and carefully considered step," said Louis J. Appell, Jr., chairman of Susquehanna Pfaltzgraff Co. "The radio and cable operations and Pfaltzgraff have strong reputations and management teams, as well as hard-working, loyal employees. However, the passage of time has had a major impact on corporate and family circumstances, including the absence of a member of the younger generation inclined to assume a leading management role. Consequently, the family shareholders concluded that we have a responsibility to examine the potential strategic options for our businesses."
Appell added, "At this time, we have decided to initiate a sale process, at the conclusion of which we will determine if the offers yield a compelling value to our shareholders.”
The company has retained UBS Investment Bank to manage the sale of Susquehanna Media Company, and Sawaya & Segalas & Co. LLC to manage the sale of The Pfaltzgraff Company.
The early word from media brokers is that Susquehanna is “asking” $1.2 billion for the radio group. One broker told Billboard Radio Monitor he thought that number was “sort of low, but maybe I’m getting bad data.” This broker told Monitor the $1.2 billion figure is “based on a 17-times cash flow multiple and on $75 million in cash flow.” This same broker said, “if it were me, I’d put it out there at 20 times [cash flow] because we’re talking about some irreplaceable assets.”
The speculation is that the radio group would be sold intact, as a stock sale, and that any buyers who couldn’t hold the entire Susquehanna portfolio of stations, because of FCC ownership restrictions, would then spin some properties to other buyers.
The most prominent company that has expressed early interest as a buyer is Infinity. Joel Hollander, chairman of Infinity, said during the A.G. Edwards conference on April 18, 2005: “We want to operate in the bigger markets. You’re going to see, Susquehanna, it looks like, is going to come out to be sold potentially soon. We’d certainly be interested in some of those bigger markets that we have some holes in, Houston and Atlanta, we’d be very interested in.” |