• by Wayne Friedman , David Goetzl  @dgoetzl, July 1, 2013

The big wave of TV station group deals continues -- now with Tribune Co. buying up Cincinnati-based Local TV Holdings’ 19 stations.

Tribune Co. is moving deeper into local TV after emerging from bankruptcy, reaching a $2.73 billion deal to acquire a new station portfolio, notably a collection of Fox affiliates in top-35 markets. The deal with Local TV, LLC pushes Tribune’s ownership from 23 stations to 42.

Tribune says the deal, expected to close by the end of 2013, will generate more than $100 million in annual savings within five years. Its stock was up over 5% in mid-day trading to $59.75.  Local TV is owned by private-equity firm Oak Hill Capital Partners.

Local TV’s stations include Fox affiliates in Denver, Cleveland, St. Louis and Kansas City. Tribune looks to emerge with Fox-CW duopolies in Denver and St. Louis.

Tribune indicated the acquisition will give the company more heft in negotiating retrans consent agreement with distributors, which could also help build distribution and prominence for its cable network, WGN America. New distribution will also give it a chance to produce and distribute content original through its new studio.

Still, even with the acquisition, much of Tribune’s broadcast fate will be determined by the performance of the CW networks, where it will own 14 affiliates, including in New York, Los Angeles and Chicago. The Local TV deal will give it five CBS affiliates in markets 44 and up.

Speculation calls for Tribune to divest its newspaper assets, which include the Chicago Tribune and Los Angeles Times.

Peter Liguori, Tribune CEO, stated that the deal will help in “setting the strategic foundation to transform Tribune” as the deal is expected to close by the end of the year.

In addition, Tribune is touting potential synergies from the deal with a $100 million-plus annual run rate within five years. The effective purchase price on a pro forma basis is about 7 times 2011 and 2012 average EBITDA.

The deal is the latest major acquisition as the local TV space undergoes consolidation. Recently,Gannett Co.’s agreed to buy Belo Corp. for $1.5 billion. Sinclair Broadcast Group, an active major buyer, acquired Fisher Communications ($373.3 million), Barrington Broadcasting ($370 million), Titan Television ($115.4 million), and four stations of Cox Media Group ($99 million). Overall, the industry saw $3.2 billion in deals during last quarter -- the highest in six years.

Analysts believe other big TV station groups to be targeted for acquisition include Lin TV Corp, which has 43 stations, and Gray Television, which has 41 outlets, have seen active -- and higher -- trading this year.

"TV Antenna" photo from Shutterstock.