Arlington Capital Partners adds another television station to its investment portfolio today with the $20 million purchase of NBC affiliate WKJG in Fort Wayne, Ind.
"This just fits exactly the strategy of what we're looking to build," said Perry Steiner, managing director at Arlington Capital.
Last year Arlington Capital, a private equity firm based in the District, launched New Vision Group LLC to acquire middle-market, network-affiliated television stations. Its first purchase, in September, was KSBY, an NBC affiliate in San Luis Obispo, Calif., for $39.5 million. The firm has also bought stations in Amarillo, Tex., and Clovis, N.M.
"We've been able to identify underperforming stations where management can bring operating improvements," Steiner said.
New Vision hopes to assemble a portfolio of about 15 television stations that it could sell to a larger company.
The Federal Communications Commission this year is expected to take up changes to television station ownership regulations that could help the group sell its investments, Steiner said.
The changes "could lead to increased consolidation in the industry," he said.
"It's not something we're banking on but we would view that very favorably."
Steiner also said the advertising spending outlook for its stations is brighter for this year.
Arlington Capital's first station acquisition was financed in part by MCG Capital Corp., an Arlington investment firm that also participated in the WKJG purchase.
Arlington Capital has also expanded its access to outside financing by adding CapitalSource Finance LLC of Bethesda to its investment partnership.
Steiner said the two companies will provide up to $40 million in debt financing for the venture on top of the $75 million Arlington Capital has committed to spend.
It is the third transaction for the new media practice launched by CapitalSource in October.
"This was a great opportunity for us to use our new expertise," said John K. Delaney, chief executive of CapitalSource.