TEN Agrees To Sell Eye Corp To oOH!media
The previously announced strategic review of EYE by its 100% owner TEN came to resolution at the end of last week, with an agreement to sell EYE Corp Pty Limited to Outdoor Media Operations Pty Limited, owner of oOh!media Pty Limited, an Australian outdoor advertising specialist. OMO is controlled by Champ Private Equity.
The transaction will incorporate EYE’s Australian and New Zealand businesses, as well as the US, UK and Indonesian operations.
The transaction values EYE, excluding certain retained Australian onerous contracts, at up to $145 million.
This will comprise gross cash proceeds of up to $120 million at completion and deferred consideration of $25 million payable three years post completion.
The final cash proceeds will be subject to certain adjustments in respect of the sale proceeds of the US and UK operations, and for agreed working capital levels, capital expenditure obligations, and transaction costs.
OMO, with the assistance of TEN, intends to sell the US and UK operations of EYE to appropriate third parties. Sale of the US and UK business units will be considered parallel and this process will be lead by TEN.
In the event that either the US or UK or both of these operations are not sold to appropriate third parties within an agreed timeframe, TEN may choose, or be required, to reacquire them from OMO for nominal consideration. TEN will have an economic exposure to the outcome of the sale of the US and UK operations and, until sold, the funding of those operations.
Certain of EYE’s Australian onerous contracts will be retained by TEN but the operation of the relevant assets will be subcontracted to OMO. The net present value of these onerous contracts is estimated to be approximately $16 million.
James Warburton, TEN’s CEO and managing director, says, “Successful completion of the transaction with OMO will be good news for TEN. It will make our balance sheet stronger by further reducing debt and will give us additional opportunity to invest in the creative renewal of TEN’s television content.”
The transaction will not be concluded until there is a mandatory review by the Australian Competition and Consumer Commission and the commission finds no issues. That process is likely to start this coming week. It is open ended and the Commission process does not fit a defined timeline. The assumption is that this could take somewhere between three and five months. After that, the completion process can begin
TEN intends to use the proceeds to pay down debt and, combined with the $200 million gross proceeds raised through the recent underwritten pro rata accelerated renounceable entitlement offer, this transaction will further strengthen TEN’s balance sheet and provide additional refinancing flexibility.
The transaction is subject to agreed completion conditions, including regulatory and third party consents and finalization of certain ancillary documents.
Categories: DailyDOOH Update
