• by Wayne Friedman , David Goetzl  @dgoetzl, July 29, 2013

Continuing its extraordinary acquisition binge in the local TV industry, the Sinclair group has a deal to purchase Allbritton’s seven ABC stations across the country and a local cable news channel in the Washington market. The deal includes the ABC station in Washington, which is ripe to keep generating big political dollars from candidates running in Virginia.

The ABC affiliates in the $985 million agreement cover about 5% of the country. NewsChannel 8, which reaches 2 million homes, has a long history as a 24/7 news outlet in the D.C. area. The deal is expected to close by the end of the year.

The company said the deal was valued at seven times its 2011 and 2012 average cash flow, or EBITDA (earnings before interest, taxes, depreciation, and amortization). The Sinclair-Allbritton $985 million purchase price represents 8.7 times its 2011-2012 cash flow. Including all previously announced Sinclair acquisitions, the big Baltimore-based TV group now says its pro forma revenues would have been $1.609 billion for 2011 and $1.865 billion for 2012.

With the arrangement, Sinclair expects to divest its MyNetworkTV and CW affiliates in Birmingham; the CBS station in the Harrisburg, Pa. area; and MyNetworkTV affiliates in Charleston, S.C. Plans call for providing services, such as sales, to help those stations operate.

As Sinclair divests assets in Birmingham, it will pick up Allbritton’s ABC operations in the market, the 42nd-largest DMA. Also, the deal will bring it the ABC station in Harrisburg, the 43rd-largest market.

Wells Fargo analyst Marci Ryvicker wrote that she believes NewsChannel 8 is critical in the deal, and Sinclair plans to extend its reach elsewhere. That could help generate higher retrans consent fees.

Earlier this month Chicago-based Tribune Co. announced a deal to buy Cincinnati-based Local TV Holdings’ 19 stations for $2.73 billion. Analysts believe other big TV station groups that will be targeted for acquisition include Lin TV Corp, which has 43 stations, and Gray Television, which has 41 outlets. Those stock have seen active -- and higher -- trading this year .