Hispanic TV, Radio Firm Entravision Plans IPO

Entravision Communications Corp., a rapidly growing Spanish-language media company, plans to raise as much as $615 million in an initial public offering, according to federal filings made Friday.

The Santa Monica company hopes to capitalize on investors’ appetite for the growing and lucrative Hispanic media market.

“With a larger U.S. Hispanic population, there are more viewers and listeners--hence more revenues and more media ownership changes as new investors rush to buy TV and radio stations,” said Adolfo Aguilar, president of San Antonio ad agency Creative Civilization and immediate past president of the Assn. of Hispanic Advertising Agencies.

Entravision has expanded its Spanish-language radio, television and print media holdings dramatically in recent months through a string of acquisitions, including Latin Communications Group of San Jose. Deals are also pending with Sacramento-based Z-Spanish Media Corp. and two Los Angeles radio stations.

Univision Communications Inc., which runs the largest Spanish-language broadcasting network in the country, is a substantial backer of Entravision, having invested $120 million. It is unclear what stake Univision holds in the company or will hold after the IPO, according to Entravision’s filings with the Securities and Exchange Commission.

Entravision will own 31 TV stations, with Univision affiliates in 17 of the largest U.S. Hispanic markets--including California, Nevada, Colorado and New Mexico--once pending deals are complete. Along with being the largest Univision affiliate in the U.S., Entravision also will own 60 radio stations in 24 markets, 10,000 billboards in the Los Angeles and New York areas and El Diario/La Prensa, the oldest Spanish-language daily newspaper in the U.S.

“Univision has done phenomenally well--they continue to exceed their [growth] projections year after year and keep the lion’s share of the Hispanic television market, with an aggressive sales force,” said Lionel Sosa, head of Garcia/LKS, a Hispanic advertising firm in San Antonio.

This week Univision reported first-quarter earnings above analysts’ estimates, as operating profit rose to 17 cents a share from 8 cents a year earlier. Univision’s stock took flight last year and is up 86% in the last 52 weeks, though its momentum has slowed and it is up just 4% year-to-date.

While Entravision did not disclose how many shares it will sell to the public, or a per-share price range, the deal could be one of the larger IPOs of this year, if it’s successful. The average size of an IPO last year was $149 million, according to CommScan, a New York data firm.

An Entravision spokeswoman could not comment on the IPO because the company is in the “quiet period” imposed by the SEC before and after any stock offering.

The IPO market has been particularly hard hit this year, with many new stocks underwater, but analysts note that companies often file for offerings during downturns--betting on a recovery in the months ahead.

The deal is being sold by lead underwriter Donaldson, Lufkin & Jenrette, and the stock would trade on the New York Stock Exchange under the symbol EVC.

The rise of Spanish-language media is being fueled, of course, by the rapid growth of the Hispanic population in the U.S. Hispanics represent 11% of the nation’s population, and their numbers are growing six times as rapidly as those of non-Hispanics, according to data in the company’s SEC filing.

Still, Entravision is not profitable--in part because of its rapid acquisition pace. The company reported a net loss of $38.6 million on revenue of $59 million for the year ended Dec. 31, contrasted with a loss of $2.3 million on revenue of $44.8 million a year earlier.

This month, Entravision completed its acquisition of Latin Communications Group for $252 million. Its pending acquisition of Z-Spanish Media, which operates 33 radio stations in 13 markets, including Dallas-Fort Worth, Phoenix and Sacramento, is worth $475 million.

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Entravision at a Glance

Spanish-language media company Entravision Communications owns and operates television and radio stations in most of the leading U.S. Latino markets.

* Founded: 1996

* Headquarters: Santa Monica

* Leadership: Chairman and Chief Executive Walter Ulloa, President Philip C. Wilkinson

* Print: Owns El Diario/La Prensa, the leading Spanish-language daily in New York.

* Broadcast: As largest Univision affiliate in the U.S., owns 31 TV stations, including 17 Univision affiliates. Also owns or is buying 60 radio stations.

* Advertising: Owns 10,000 billboards.

Sources: Company Web site; S-1 filing

Researched by NONA YATES/Los Angeles Times