APN sells remaining half of outdoor business

APNO Logo Stacked Text Blue CMYKAPN News & Media has agreed to sell the other half of its out of home advertising business APN Outdoor to Quadrant Private Equity.

APN sold the first half of APN Outdoor to Quadrant last year for $190m although this included $110m of debt.

It has agreed to sell the remaining 50 per cent for $69m, which the company said represents 7.5 times the outdoor unit’s EBITDA (earnings before interest, taxation, depreciation and amortisation) profits in the last financial year, putting APN News & Media’s share of  profits from the business $9m.

This marks a drop from last year’s EBITDA for APN Outdoor of $30m, which was itself down 19 per cent on the year before. However, this $30m was for 100 per cent of the business.

This year the outdoor company saw profits drop by about 20 per cent thanks in part to increased competition in the large panel format space.

APN Outdoor’s CEO Richard Herring told Mumbrella that despite the sale to Quadrant, the brand would remain the same. He said: “It’s a brand we’re investing in. The story for our staff and our customers is that it is business as usual. There will be no operational changes at all.”

He said he was not in a position to speculate on the future of the company beyond its ownership by the private equity company. He said: “There are a number of combinations of opportunity going forward. What happens in two, three, five or ten years, I don’t know.”

Herring said one potential benefit for the outdoor brand would be that it now reported in to one owner rather than two. He said: “We will be investing in new products and formats. The market is running up five or six per cent for the calendar year.”

APN is currently waiting to hear if it has successfully retained its NSW RailCorp contract.

The sale has been received positively by the market. Shares in APN News & Media jumped by about 7 per cent on early trading, taking the valuation of the company above $300m for the first time in more than a year.

As well as its regional newspaper business and a handful of digital assets, APN owns a half share in outdoor brand Adshel and in Australian Radio Network.


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