Australian Radio Network to acquire Grant Broadcasters for $307.5mn

Australian Radio Network to acquire Grant Broadcasters for $307.5 million

SYDNEY, AUSTRALIA: Australian Radio Network Pty Ltd (ARN), a wholly owned subsidiary of HT&E Limited, has entered into an agreement to acquire Grant Broadcasters for consideration of $307.5 million on a cash and debt free basis.

This includes the acquisition of the radio and digital operations owned by Grant Broadcasters Pty Ltd, including 43 legal entities and certain relevant assets. Geelong Broadcasters Pty Limited and certain joint ventures are excluded from the transaction.

Grant Broadcasters is family-owned and the leading regional radio broadcaster in Australia. Australian Radio Network (ARN) is the No.1 metropolitan radio broadcaster in the country. The combined businesses will create a truly national broadcast network of scale made up of 58 radio stations, 46 DAB+ stations across 33 markets resulting in a presence in every state and territory in Australia.

Unlocking new growth markets, the acquisition also provides the potential for significant digital audio expansion by accelerating the rollout of Australian Radio Network’s established iHeartRadio digital audio platform into regional areas.

With LTM June 21 pro forma revenues of $100.7 million, EBITDA of $35.5 million and strong cashflow generation, this transaction values Grant Broadcasters at $307.5 million, implying a c.8.7x LTM June 21 pro forma EBITDA and c.10.3x LTM June 21 pro forma EBIT multiple.

HT&E Chairman, Hamish McLennan, said, “We are delighted to be announcing this transaction today with Grant Broadcasters – a broadcasting business of the highest quality and a fantastic, family-owned Australian success story that Janet Cameron and her family should be incredibly proud of.

The station brands they have created have served their local communities with great commitment for decades, playing a pivotal role in the lives of their audiences, and we look forward to continuing that tradition.

“The recent successful resolution of the tax matter with the ATO for $71 million and a $31 million gain on the divestment of our OML stake, significantly strengthened our balance sheet as we prepared for this transaction.

Our disciplined approach to capital management and creation of shareholder value is further demonstrated by the accretive nature of this transaction that is being funded through existing cash reserves, financing facilities and the issuance of new shares to Grant Broadcasters”.

HT&E CEO and Managing Director, Ciaran Davis, said, “It is rare that an asset of this quality and strategic fit to our existing portfolio becomes available and we are excited by the opportunities presented by the coming together of these two great businesses.

“Strategically, this transaction fits very well with the growth ambitions we have for HT&E, allowing us to expand our audience base and fast-track the delivery of our digital audio content and advertising opportunities across Australia.

The combined network will be made up of 58 stations, across 33 markets, delivering innovative, digitally enabled commercial solutions at the scale that our advertising partners seek.

It will also enable us to provide nationally integrated commercial partnerships for clients, giving them the ability to access more than a third of Australian consumers in one transaction.

“The leading metropolitan audio network and the leading regional radio network will have an unwavering commitment to live, local and multi-platform content, across an 8 million strong broadcast and digital distribution network, and presents an appealing proposition for our clients, listeners, employees and shareholders.

Grant Broadcasters CEO, Alison Cameron, said, “Grant Broadcasters are delighted to be partnering with HT&E, who we consider to be the leading provider of radio and digital audio in Australia.

“For 80 years Walter Grant, his daughter Janet Cameron and her family have been operating regional radio stations that serve local communities in regional Australia. We are so very proud of the connection the stations have with those communities and with our staff for continuing that commitment.

“There is a strong cultural similarity between the two businesses with both ARN and Grant committed to expertly creating great local content for the communities we serve. Together we’ll be an elevated team of dedicated audio professionals who live and breathe our local audiences.

“Both our companies are profitable enterprises in their own rights, but this partnership will deliver scale, digital acceleration, and ensures our future profitability.”

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