QMS Media to be acquired by Quadrant Private Equity
QMS Media is likely to end up in the hands of private equity, with the outdoor company announcing it has entered into a Scheme Implementation Deed (SID) with Quadrant Private Equity and its institutional partners.
The deal will round out a busy few years in the out-of-home sector, with Ooh Media buying street furniture business Adshel from Here, There and Everywhere (HT&E), and international giant JC Decaux purchasing APN Outdoor.
This deal would see Quadrant acquire 100% of QMS in an all-cash offer of $1.22 per share. The deal values QMS’ equity at $420.6m, with an enterprise value of $571.6m, implying an EV/CY 19 EBITDA (earnings before interest, tax, depreciation and amortisation) of 9.4x.
This is interesting.
A private equity group is buying 100% of a listed company at a c. 36% premium to its last traded share price. The business is seemingly performing pretty well and the purchaser is reportedly intending to retain the company’s existing management team. Yes, the share price has been a little patchy since listing but it has been positive over the course of 2019.
If there is sufficient upside in the business to justify a private equity bid at a 36% premium, why would the current shareholders be in a hurry to sell out now?