NBC Universal and two partners said Sunday that they had reached a deal to buy the Weather Channel from Landmark Communications Inc., ending a drawn-out process that had attracted interest from several major media companies.
The purchase price was about $3.5 billion, according to a person who asked not to be identified because the terms weren't made public. The channel will be operated as a separate entity based in Atlanta, and management will be provided by NBC Universal, the companies said in a statement.
NBC's partners in the transaction were private equity firms Blackstone Group and Bain Capital.
In addition to the Weather Channel, which can be seen by 97% of U.S. cable subscribers, the deal includes several related assets such as weather services for newspapers and radio stations and the widely viewed website Weather.com.
Landmark's Weather.com drew 36.4 million unique U.S. viewers in May, making it the 15th most-popular Internet property, according to ComScore Inc., a Reston, Va., researcher. NBC sites, excluding IVillage.com, didn't rank in the top 50.
"It could embellish their presence," James Goss, an analyst at Barrington Research in Chicago, said before the announcement. The deal also removes the Weather Channel as a competitor, he noted.
NBC Universal, a unit of General Electric Co., became the sole bidder for the Weather Channel last month after Time Warner Inc. dropped out. CBS Corp. and cable industry leader Comcast Corp. also had expressed interest.
NBC already operates a digital weather and news service, the 4-year-old NBC Weather Plus, which would make a logical fit with the Weather Channel. NBC Weather Plus can be seen on digital cable services operated by NBC stations.
The Weather Channel has 1,300 employees and estimated annual revenue of $550 million. NBC and Landmark said they expected the transaction to close by year-end, pending regulatory approval.
Weather.com is "the most highly coveted asset in the Landmark transaction, as the website is likely to serve as the growth driver moving forward," Lehman Bros. analysts Anthony DiClemente and Vijay Jayant said in January.
Landmark, a privately held media company in Norfolk, Va., put the Weather Channel up for sale in January along with its other businesses, which include the Virginian-Pilot and eight other daily newspapers. No announcement has been made about the newspapers.