APN takes control of Adshel and buys Conversant Media

The acquisition provides APN with an opportunity to further pursue growth in the outdoor sector

• APN moves to full ownership of Adshel for $268.4 million, through acquisition of remaining 50% interest in the Adshel joint venture from a subsidiary of Clear Channel Outdoor

• APN also announces the acquisition of digital media business Conversant Media for upfront cash consideration of $11.6 million and performance-based earn-outs

MORE: Conversant Media – playing in a crowded field

APN News & Media has announced that it has entered into a binding agreement to acquire the remaining 50% of Adshel that it does not already own (the Acquisition). APN will effect the transaction by acquiring Clear Channel Outdoor Pty Limited, whose sole asset is its 50% stake in Adshel Street Furniture Pty Limited (Adshel).

Strategic Rationale

The Acquisition provides Adshel with the capital certainty it needs to pursue growth opportunities and greater alignment with APN, increases APN’s exposure to the attractive out-of-home industry, which for the year-to-date has grown by 17% in Australia, and creates a unique advertiser proposition with an integrated radio/outdoor/mobile/video platform. It also provides APN with greater ability to target advertisers with fully integrated campaigns that offer scale, accountability and content creation capabilities.

Ciaran Davis

Ciaran Davis

CEO and managing director of APN, Ciaran Davis, said:

“The Acquisition of the remaining 50% of Adshel continues APN’s significant transformation, placing APN in a stronger position in the Australian media industry by creating a unique proposition to deliver an integrated radio, outdoor, mobile and video offering.

“The Adshel acquisition is consistent with the plans we have outlined to focus on our assets in high growth areas, and provides APN with an opportunity to further pursue growth in the outdoor sector. It will allow the Adshel management team to drive the strategic direction of the business and pursue opportunities that facilitate growth, including a continued focus on innovation and the progressive digitisation of the portfolio. As the demands of advertisers rapidly change, this transaction will increase the effectiveness of implementing integrated marketing campaigns at scale across all of APN’s businesses.”

In the 12 months to 30 June 2016, Adshel generated revenues of approximately $170 million and EBITDA of approximately $42 million.

The acquisition will be funded by a debt bridge facility, accelerated placement and APN’s existing debt facilities. The debt bridge facility is to be repaid from proceeds of a fully underwritten equity raising of $273 million, comprising an institutional placement of up to approximately $72 million and an accelerated renounceable entitlement offer with retail rights trading of approximately $201 million.

The Acquisition is not subject to any conditions and therefore is expected to be completed today.

Conversant Media

APN has also entered into a binding agreement to acquire Conversant Media, which will facilitate the growth of APN’s audience base through an enhanced content offering and diversification of revenues into the growing revenue streams of mobile, social and video. Subject to the satisfaction of certain conditions, this acquisition is expected to complete at the end of this month (October 2016).

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