Moody's views Sinclair purchase as positive

Moody's Investors Service said that Sinclair reported on Nov. 2 that it entered into an agreement to purchase the broadcast assets of Freedom Communications for about $385 million reflecting an approximate 9x EBITDA multiple for Freedom and a 6.6x forward EBITDA multiple for Sinclair.

"Moody's views the proposed acquisitions as credit positive, despite the temporary increase in leverage, given the added station diversification as well as the continuing addition of non-Fox affiliates to the company's portfolio of stations," Carl Salas, a senior analyst at Moody's, said in a news release.

"Debt to EBITDA ratios are expected to increase by 0.5x turns for both transactions partially reflecting Sinclair's ability to eliminate redundant costs. Furthermore, the ability to operate a duopoly in West Palm Beach as a result of the Freedom transaction provides incremental benefits," Salas said.

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