iHeartMedia 2001 Annual Report Download - page 75

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75
NOTE B - BUSINESS ACQUISITIONS
Pending Ackerley Merger (unaudited)
On October 5, 2001, the Company entered into a merger agreement to acquire The Ackerley Group, Inc.,
(“Ackerley”). Ackerley holds a diversified group of outdoor, broadcasting and interactive media assets.
This merger will be a tax-free, stock-for-stock transaction. Each share of Ackerley common stock will
convert into 0.35 shares of the Company’s common stock, on a fixed exchange basis, valuing the merger,
based on average share value at the signing of the merger agreement, at approximately $474.9 million
plus the assumption of Ackerley’s debt, which was approximately $290.6 million at December 31, 2001.
This merger is subject to regulatory approval and other closing conditions. The Company anticipates that
this merger will close during the first half of 2002.
2001 Acquisitions:
During 2001, the Company acquired substantially all of the assets of 183 radio stations, approximately
6,900 additional outdoor display faces and the live entertainment segment acquired music, sports and
racing events, promotional assets and sports talent representation contracts. The Company also acquired
two FCC licenses of television stations, both of which we had previously been operating under a local
marketing agreement, national representation contracts, and other assets. In addition, the Company
exchanged one television license for two television licenses and $10.0 million of cash that was placed in
a restricted trust for future acquisitions. The exchange was accounted for at fair value, resulting in a gain
of $168.0 million, which was recorded in “Other income (expense) - net”.
The Company has entered into certain agreements relating to acquisitions that provide for purchase price
adjustments and other future contingent payments based on the financial performance of the acquired
company. The Company will continue to accrue additional amounts related to such contingent payments
if and when it is determinable that the applicable financial performance targets will be met. The
aggregate of these contingent payments, if performance targets are met, would not significantly impact
the Company’s financial position or results of operations.
The Company’s 2001 acquisitions resulted in additional licenses and goodwill of approximately $1.2
billion, including $233.7 million relating to non-cash asset exchanges.
2000 Acquisitions:
Ackerley’s South Florida Outdoor Advertising Division
On January 5, 2000, the Company closed its acquisition of Ackerley’s South Florida outdoor advertising
division (“Ackerley FL Division”) for $300.2 million. The Company funded the acquisition with
advances on its credit facilities. This acquisition was accounted for as a purchase, with resulting goodwill
of approximately $208.3 million, which is being amortized over 25 years on a straight-line basis. The
results of operations of Ackerley FL Division have been included in the financial statements of the
Company beginning January 5, 2000.