Sinclair: Tribune Acquisition to Create Largest U.S. Broadcast Group

Robert Deaton presented his in-depth investment thesis on Sinclair Broadcast Group (Nasdaq: SBGI) at Wide-Moat Investing Summit 2017.

Sinclair is acquiring Tribune Media (NYSE: TRCO). The combined company will be the largest broadcast station group in the United States, covering 72% of U.S. households, including those in 39 of the top 50 markets. On a pro forma basis, the combined company can generate $1+ billion in annual free cash flow. Robert believes the company would benefit from selling equity and/or non-core assets to reduce the debt-to-EBITDA ratio to 3.5:1. This should result in FCF per share of about $5.90. Assuming a 10% FCF yield, Robert places a target price of $59 per share on the equity.

Robert Deaton has enjoyed a long and successful investment management career as a money manager and private investor. Currently, Robert is managing member of Fat Pitch Capital, an investment partnership. Robert was a founding member of Bennett Lawrence a NY-based investment fund, which had peak assets of over $2 billion. Robert was chief investment officer of Cambium Capital and member, and is past managing member of Deaton Partnership. Robert holds an AB from Davidson College, an MBA from Vanderbilt University and is a CFA charter holder. Robert is an active member of numerous community organizations. He is a board member of the Presbyterian Healthcare Foundation (executive committee), the Physicians Impact Fund and the Vanderbilt University Owen School of Management Alumni Board. He is a member of the Board of Trustees at The Fletcher School (executive committee, treasurer-elect). He is a past two-term member of both the Board of Visitors at Davidson College and the Board of the Davidson Athletic Foundation. Robert is married with two children.

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