Blackstone Investment Fund Invests in Minority-Owned US Radio
NEW YORK (AP) _ US Radio Inc., a minority-controlled broadcasting company that owns 14 radio stations, is getting a $26 million infusion from a private investment fund managed by The Blackstone Group, it was announced Monday.
Blackstone Capital Partners II Merchant Banking Fund said it had acquired an 80 percent economic interest and a 49 percent voting stake in US Radio, which is based in Philadelphia.
Partnerships controlled by Ragan Henry, US Radio’s chairman and chief executive, will own the remaining stock, which carries 51 percent of the company’s voting power.
″We are very pleased to have a partner of Blackstone’s reputation and financial capacity,″ said Henry, who is one of the most prominent black owners in the broadcasting business.
Blackstone said it was ready to invest more money to help US Radio grow into one of the biggest radio companies in the nation.
Blackstone Group, a private investment bank based in New York, tapped a fund with $1.3 billion in capital for the investment in US Radio.
In addition to the Blackstone investment, US Radio said it has arranged with Chemical Securities Inc. for a new $72 million line of credit that will be used to refinance its debt and finance more station acquisitions.
Stephen A. Schwarzman, president and chief executive of Blackstone, said US Radio’s stations are well positioned and profitable.
″We think the combination of the company’s management expertise and our capital will lead to further acquisition opportunities and we look forward to participating in this growth,″ he said.
″Our joint goal is to build the company into one of the largest radio broadcasting companies in the country, and Blackstone is prepared to invest significant additional capital to facilitate this objective,′ Schwarzman said.
In an interview, he said US Radio can own as many as 40 radio stations.
Schwarzman said US Radio stands to benefit from the recent improvement in the economy and in demand for advertising time on radio stations generally.
He said the company has been under financial pressure because it bought stations at the peak of prices and had heavy debt payment obligations.
″It wasn’t because it didn’t do a good job running the stations but because it paid too much for them to start with,″ Schwarzman said.
US Radio broke even last year on about $22 million in revenue, according to its chief financial officer, Michael Driscoll.
Its stations are in six markets: Memphis, Tenn.; Norfolk, Va.; Raleigh- Durham, N.C.; Reading, Pa., and El Paso and Freeport in Texas.