WhiteHawk Capital Partners Provides Credit Facility to MediaCo

Rhea-AI Summary

WhiteHawk Capital Partners announced a $45 million first lien term loan facility with MediaCo Holding on April 17th, 2024. MediaCo used the proceeds to acquire Estrella Media’s network, content, digital, and commercial operations, enhancing its portfolio with Spanish-language video, audio, and digital content. This acquisition expands MediaCo's reach to include Estrella Media's established Mexican radio stations, such as Que Buena Los Angeles and La Raza in Houston and Dallas. The combined footprint positions MediaCo as a leading provider of Spanish and Urban music in both terrestrial radio and audio streaming.

Positive

• MediaCo secures $45 million loan, aiding strategic acquisition.
• Acquisition of Estrella Media broadens MediaCo's content portfolio.
• Expanded reach into Spanish-language market enhances MediaCo's audience base.
• Combined network positions MediaCo as a top provider of Spanish and Urban music.

Negative

• Large loan could increase MediaCo's debt burden.
• Integration risks associated with merging Estrella Media operations.
• Potential dilution of MediaCo's brand identity with added Spanish-language content.

Insights

Financial Analyst

WhiteHawk Capital Partners providing a $45 million credit facility to MediaCo is a significant financial strategy that signals confidence in MediaCo’s ability to leverage acquisitions for growth. The use of this facility to acquire Estrella Media’s assets is pivotal. This move could enhance MediaCo’s revenue streams by diversifying its content offerings and expanding its audience base.

From a revenue synergy perspective, integrating Estrella Media’s Spanish-language content with MediaCo’s existing urban radio stations can create cross-promotional opportunities. MediaCo now has access to established audiences in both the urban and Spanish-language markets, which could result in higher advertising revenues.

However, investors should be cautious of the debt burden that comes with this facility. The $45 million term loan will add to MediaCo’s liabilities and the company’s ability to service this debt will be critical. MediaCo’s financial health will need to be monitored closely, particularly its earnings before interest, taxes, depreciation and amortization (EBITDA) margins, to ensure it can absorb the new debt without compromising its financial stability.

Short-term, the announcement tends to boost investor sentiment due to growth potential. Long-term, the execution of integration and debt servicing will determine the actual impact. Investors should keep a watch on upcoming financial reports for any shifts in key financial metrics.

Market Research Analyst

From a market positioning viewpoint, MediaCo’s acquisition of Estrella Media's operations is a strategic move aimed at strengthening its content portfolio and market reach. This expansion into Spanish-language media allows MediaCo to tap into the rapidly growing Hispanic market in the U.S., which has been underserved in terms of tailored media content.

The Hispanic media market growth rates are impressive, supported by demographic trends and increasing ad spend targeted towards Hispanic audiences. MediaCo's acquisition positions the company to capture a larger share of this market. The inclusion of well-known stations and shows like 'Don Cheto Al Aire' under MediaCo’s umbrella is likely to attract advertisers looking to reach a diverse and engaged audience.

Moreover, the trend towards digital and streaming audio consumption among young listeners aligns well with MediaCo’s expanded offerings. This could lead to substantial growth opportunities in digital ad revenues as the company capitalizes on shifting media consumption habits.

LOS ANGELES--(BUSINESS WIRE)-- WhiteHawk Capital Partners, LP ("WhiteHawk"), a private credit investment manager focused on asset-based financing solutions, announced it has entered into an agreement with MediaCo Holding, Inc. (“MediaCo”) to provide a $45 million first lien term loan facility (the "Facility") on April 17^th, 2024. MediaCo used proceeds of the Facility to finance an acquisition of Estrella Media’s network, content, digital, and commercial operations.

MediaCo, which operates marquee urban radio stations HOT 97 and WBLS 107.5 in New York City, will be adding Estrella Media’s Spanish-language video, audio, and digital content operations under the same umbrella. This transaction will also allow MediaCo to reach the established audiences of Estrella Media’s market-leading regional Mexican radio stations, including Que Buena Los Angeles, home of the Don Cheto Al Aire nationally syndicated morning radio show, La Raza in Houston and Dallas, and El Norte in Houston.

The combined footprint of MediaCo positions it as one of the strongest radio content providers for Spanish and Urban music in both terrestrial radio and audio streaming.

“We are thrilled to work with the WhiteHawk team again, and their creativity and flexibility make them the perfect partner for our growth. Their support will empower us to expand our business further,” said Deb McDermott, Chairwoman of MediaCo’s Board of Directors.

“We are excited to continue our partnership with MediaCo. The combination of their respected media brands and talented team position them well for continued growth” said Brad Huge, WhiteHawk Managing Director.

About WhiteHawk:

WhiteHawk Capital Partners, LP is a private credit investment manager focused on asset-based financing solutions primarily to middle market private and public companies across a variety of industries. WhiteHawk provides senior secured financings under a variety of structures for purposes of refinancing, recapitalization, growth, acquisition, restructuring, bridge, and DIP/emergence. For more information visit www.whitehawkcapital.com or contact info@whitehawkcapital.com.

About MediaCo :

MediaCo Holding Inc. (“MediaCo”) is a publicly listed media company (NASDAQ: MDIA) that super-serves communities throughout the country. MediaCo owns and operates two iconic radio stations in New York City, HOT 97 (WQHT-FM) and WBLS-FM, which boast extensive digital reach across the US. The company primarily generates revenue from advertising sales, program syndication and live events. To learn more about MediaCo, visit www.mediacoholding.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240520411013/en/

For WhiteHawk:

For all inquiries: info@whitehawkcapital.com

For MediaCo :

For all inquires: press@mediacoholding.com

Source: WhiteHawk Capital Partners, LP

FAQ

What is the significance of MediaCo's $45 million loan from WhiteHawk?

The $45 million loan enables MediaCo to acquire Estrella Media's network, expanding its content portfolio and audience reach.

How will MediaCo's acquisition of Estrella Media affect its operations?

The acquisition will integrate Estrella Media’s Spanish-language content with MediaCo's existing operations, broadening its market presence.

When did MediaCo secure the $45 million loan from WhiteHawk?

MediaCo secured the $45 million loan from WhiteHawk on April 17th, 2024.

What impact will the acquisition have on MediaCo's market position?

The acquisition enhances MediaCo's position as a leading provider of Spanish and Urban music, both in terrestrial radio and audio streaming.