Sinclair Broadcast Group (SBGI) Sells Alarm Funding Associates

March 7, 2017 3:33 PM EST

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Sinclair Broadcast Group, Inc. (NASDAQ: SBGI), announced today that its wholly-owned subsidiary, Keyser Capital LLC ("Keyser"), has sold Alarm Funding Associates, LLC ("AFA") to RPAFA Investors, LLC, an investment vehicle of Riverside Partners, for $200.0 million. AFA is the 20th largest security alarm company in the U.S.

Keyser purchased AFA in November 2007 and has invested capital of approximately $10.5 million. After the repayment of debt and other costs, Sinclair will realize approximately $70 million in pre-tax net cash proceeds or a multiple of approximately 6.7x on invested capital.

"We are pleased to report an annualized return of approximately 25% on our investment in Alarm Funding," commented David B. Amy, Vice Chairman. "Although an accretive investment for us, the sale of the alarm business, which was not part of our core operations, provides us a significant divestment opportunity. As a result of the sale, other non-media revenues less other non-media expenses for the 10 month period of March through December 2017 are expected to be approximately $20 million less than our original guidance. However, our total indebtedness will decrease by approximately $108 million in addition to the after-tax net cash proceeds of approximately $56 million which represents approximately $0.60 per share."

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