This deal was formally announced on Friday, and it's a biggie. See if you can spot the red flags if you happen to be an employee at either Cumulus or Dial Global. From Tom Taylor's column this morning...
Cumulus CEO Lew Dickey is so confident about his ability to get $40 million in “cost synergies” between DG and his own Cumulus Media Networks, he’s predicting that the $260 million deal will be a deleveraging event for Cumulus. That would be another move in the right direction for Cumulus, which recently reported leverage of 7.3-times cash flow. Breaking down the $260 million price, $215 million goes to retirement of debt, and $45 million is attributable to equity.
Let me translate "Cost Synergies" for you: Knives are being sharpened as we speak, and there will be cutting as soon as the deal is approved.
