UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 28, 2002
CUMULUS MEDIA INC.
(Exact name of registrant as specified in its charter)
ILLINOIS 000-24525 34-4159663
(State or other jurisdiction of (Commission File (I.R.S. Employer
incorporation) Number) Identification No.)
3535 PIEDMONT ROAD, BUILDING 14,
ATLANTA, GEORGIA 30305
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (404) 949-0700
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(Former name or former address if changed since last report)
Item 2. Acquisition or Disposition of Assets
On March 28, 2002, Cumulus Media Inc. announced the completion of the
acquisitions of Aurora Communications, LLC and of the broadcasting operations of
DBBC, L.L.C. A copy of the press release announcing the transactions is attached
hereto as Exhibit 99.1 and is incorporated herein by reference.
The Aurora Acquisition.
Aurora Communications owns and operates 18 radio stations in
Connecticut and New York. In acquiring Aurora Communications, we issued to the
former owners of Aurora Communications (a) 10,551,182 shares of our common
stock, consisting of 1,606,843 shares of our Class A Common Stock, and
8,944,339 shares of our non-voting Class B Common Stock, which may be converted
into shares of Class A Common Stock on a one-for-one basis, and (b) warrants,
exercisable until March 28, 2003, to purchase up to an aggregate of 833,333
shares of our common stock, consisting of warrants for 126,909 shares of Class
A Common Stock and 706,424 shares of Class A Common Stock or Class B Common
Stock, at an exercise price of $12.00 per share, and the payment of $93 million
in cash. The cash portion of the purchase price was funded with borrowings
under our new credit facility. The property, plant and equipment we acquired in
the Aurora acquisition were used in the operation of Aurora Communications
radio stations, and we intend to continue to use those assets for that
business. Based on the closing price of a share of our Class A Common Stock on
March 27, 2002 of $18.42, this transaction is valued at approximately $293
million. The consideration was determined through arm's length negotiations
between Aurora Communications and Cumulus Media. The Aurora acquisition
will be accounted for using the purchase method of accounting.
One of our directors, Robert H. Sheridan, III, is a senior vice
president and managing director of one of our principal shareholders, BA
Capital Company, L.P., referred to as BA Capital. Mr. Sheridan is also a senior
vice president and managing director of BancAmerica Capital Investors SBIC I,
L.P., referred to as BACI, which is an affiliate of BA Capital, and which
indirectly owned approximately 73% of the equity interests of Aurora
Communications. In the Aurora acquisition, BACI received 8,944,339 shares of
Common Stock and warrants to purchase 706,424 shares of Common Stock.
The DBBC Acquisition.
DBBC's broadcasting operations consisted of three radio stations in
Nashville, Tennessee. In acquiring the broadcasting operations of DBBC, we
issued to DBBC (a) 5,250,000 shares of our Class A Common Stock and (b) a
warrant, exercisable until September 28, 2002, to purchase up to 250,000 shares
of Class A Common Stock at an exercise price of $12.00 per share, and we assumed
specified liabilities of DBBC and paid certain expenses, up to an aggregate of
$21 million, using borrowings under our credit facility. The property, plant and
equipment we acquired from DBBC were used in the operation of its radio
stations, and we intend to continue to use those assets for that business. The
consideration was determined through arm's length negotiations between a special
committee of our board of directors and DBBC. Based on a closing price of a
share of our Class A Common Stock on March 27, 2002 of $18.42, this transaction
is
valued at approximately $119 million. The DBBC acquisition will be accounted for
using the purchase method of accounting.
DBBC is principally owned by Lewis W. Dickey, Jr., the Chairman,
President, Chief Executive Officer and a director of Cumulus Media, and three of
his brothers, including John W. Dickey, the Executive Vice President of Cumulus
Media. As the principal owner and manager of DBBC, Mr. L. Dickey controls the
manner in which the shares of Class A Common Stock that DBBC acquired in the
DBBC acquisition will be voted.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(a) Financial statements of businesses acquired.
The audited financial statements of Aurora Communications, LLC for
the years ended December 31, 2001 and 2000, and the period January
20, 1999 (commencement of operations) to December 31, 1999, together
with the report of Ernst & Young LLP with respect thereto are
incorporated by reference into Exhibit 99.2 to this Report.
The audited consolidated balance sheets of DBBC, L.L.C. and
Subsidiaries as of December 31, 2001 and 2000 and the related
consolidated statements of income and changes in members' equity and
cash flows for each of the three years in the period ended December
31, 2001, together with the report of Kraft Bros., Esstman Patton &
Harrell, PLLC with respect thereto are incorporated by reference into
Exhibit 99.3 to this Report.
(b) Pro Forma financial information.
The unaudited pro forma combined financial statements of Cumulus
Media Inc. incorporating both the Aurora acquisition and the DBBC
acquisition as of and for the year ended December 31, 2001 are
incorporated by reference into Exhibit 99.4 to this Report.
(c) Exhibits.
EXHIBIT NO. EXHIBIT DESCRIPTION
2.1 Acquisition Agreement, dated November 18, 2001, by and
among Cumulus Media Inc., Aurora Communications, LLC,
and the other parties identified therein, as amended on
January 23, 2002. (incorporated herein by reference to
Exhibit 2.1 of the Current Report on Form 8-K filed on
February 7, 2002).
2.2 Amended and Restated Registration Rights Agreement,
dated as of January 23, 2002, by and among Cumulus
Media Inc., Aurora Communications, LLC, and the other
parties identified therein. (incorporated herein by
reference to Exhibit 2.2 of the Current Report on Form
8-K filed on February 7, 2002).
2.3 Agreement and Plan of Merger, dated December 14, 2001,
by and among Cumulus Media Inc., DBBC, L.L.C., and
the other parties identified herein. (incorporated
herein by reference to Exhibit 2.3 of the current
Report on Form 8-K filed on February 7, 2002).
99.1 Press release dated March 28, 2002.
99.2 Audited financial statements of Aurora Communications,
LLC for the years ended December 31, 2001 and 2000, and
the period January 20, 1999 (commencement of
operations) to December 31, 1999, together with the
report of Ernst & Young LLP with respect thereto
(incorporated herein by reference to pages F-2 through
F-13 of the Definitive Proxy Statement on Schedule 14A
filed by Cumulus Media Inc. on February 28, 2002).
99.3 Audited consolidated balance sheets of DBBC, L.L.C. and
Subsidiaries as of December 31, 2001 and 2000, and the
related consolidated statements of income and changes
in members' equity and cash flows for each of the three
years in the period ended December 31, 2001, together
with the report of Kraft Bros., Esstman Patton &
Harrell, PLLC with respect thereto (incorporated herein
by reference to pages F-14 through F-26 of the
Definitive Proxy Statement on Schedule 14A filed by
Cumulus Media Inc. on February 28, 2002).
99.4 Unaudited pro forma combined financial statements of
Cumulus Media Inc. incorporating both the Aurora
acquisition and the DBBC acquisition as of and for the
year ended December 31, 2001 (incorporated herein by
reference to pages P-14 through P-21 of the Definitive
Proxy Statement on Schedule 14A filed by Cumulus Media
Inc. on February 28, 2002).
99.5 Consent of Ernst & Young LLP
99.6 Consent of Kraft Bros., Esstman, Patton & Harrell, PLLC
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Cumulus Media Inc.
Date: March 28, 2002 by: /s/ LEWIS W. DICKEY, JR.
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Lewis W. Dickey, Jr.
President and Chief Executive Officer
EXHIBIT INDEX
EXHIBIT NO. EXHIBIT DESCRIPTION
99.1 Press release dated March 28, 2002.
99.5 Consent of Ernst & Young LLP
99.6 Consent of Kraft Bros., Esstman, Patton & Harrell, PLLC