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Cumulus To Acquire Cumulus Media Partners

January 31, 2011: Cumulus Media Inc. has signed a definitive agreement to buy the equity interests in Cumulus Media Partners that it doesn't already own. CMP was formed in 2006 to buy the former Susquehanna stations and has 32 stations in nine mostly large markets. CMI has operated CMP under a management agreement since CMP was founded.

Cumulus will issue about 10 million shares of common stock to affiliates of private equity firms Bain Capital Partners, Blackstone Group, and Thomas H. Lee Partners, which collectively own 75 percent of Cumulus Media Partners. Blackstone will get class A common stock, while Lee and Bain, which have interests in Clear Channel Communications, will receive a new class of non-voting stock to keep in line with FCC ownership regulations.

"We are pleased to to announce the combination of Cumulus and CMP after having run these two radio groups as essentially one company for the last five years," Cumulus Chairman/CEO Lew Dickey said. "CMP has long been one of the most coveted sets of assets in the radio industry, and we expect it will immediately become an important driver of growth and profitability for the company."

Dickey pointed to benefits including opportunities to improve revenue growth and increase station operating margins, and to increase free cash flow yield and "provide a more diversified and strategic national platform."

Cumulus Media Inc. also intends to buy all the outstanding warrants to purchase common stock of a CMP subsidiary, in exchange for 8.3 million shares of CMI common stock. The estimated value of CMP is about $740 million, including about $660 million in debt and preferred stock. CMI specifies that the transaction will not trigger any change-of-control provisions.

The transaction is subject to shareholder and FCC approval but is expected to close in the second quarter of this year.

In related news, Blackstone Sr. Managing Director David Tolley joins the Cumulus board.

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