Warren Buffett-backed acquisition deal spurs 43% surge in E.W. Scripps

• Warren Buffett's Berkshire Hathaway will make a $600 million preferred equity investment in E.W. Scripps to help finance the television network company's acquisition of ION Media.
• A combination of E.W. Scripps and ION Media will create a national TV network business that will reach more than 100 million households via over-the-air and pay TV platforms.
• Berkshire Hathaway will also receive a warrant to purchase up to 23.1 million Class A shares of E.W. Scripps at an exercise price of $13 per share.
• The announcement sent shares of E.W. Scripps higher by as much as 43% in Thursday trades.
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Shares of E.W. Scripps soared as much as 43% in Thursday trades after it announced an acquisition of privately held ION Media for $2.65 billion.

The combination of the two media companies will create a full-scale national television network business that includes 124 affiliated TV stations, the Newsy platform, and a lineup of crime shows like "Law and Order" and "NCIS: Los Angeles."

Warren Buffett's Berkshire Hathaway will help finance the deal by making a $600 million preferred equity investment in E.W. Scripps. The deal will also give Buffett's conglomerate a warrant to purchase up to 23.1 million Class A shares at an exercise price of $13 per share.

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E.W. Scripps expects the combination with ION Media to double its Ebitda and realize $500 million in synergies over a period of six years. The combination will be accretive to Scripps' free cash flow and margins in 2021 and beyond, according to the company.

ION Media is privately held, controlled by Black Diamond Capital Management.

In order to receive FCC approval of the deal, Scripps will divest 23 ION stations.

The deal is expected to close in the first quarter of 2021.