Mecom Group plc has agreed the sale of Mecom Europe AS, which is the holding company for Edda Media AS, Mecom’s media business in Norway to A-pressen AS for an enterprise value of NOK1,725 million (€222 million).
The enterprise value of NOK1,725 million (€222 million) represents 7.9 times Edda Media’s FY 2010 EBITDA and 7.2 times Edda Media’s FY 2011 consensus EBITDA. This is a significant premium to Mecom’s corresponding trading multiples.
After adjusting for certain minority interest, net debt and working capital items, the effective proceeds to Mecom for the Mecom Europe shares are expected to be approximately NOK1,800 million (€231 million) of which approximately NOK300 million (€39 million) will be represented by cash in Edda Media.
Edda operates 33 newspaper and websites. Its half-year revenue and profit have grown this year, with circulations down only one percent.
Tom Toumazis, Chief Executive of Mecom, said, “The sale of Edda Media is at an attractive valuation. It will allow Edda Media to benefit from consolidation in the Norwegian media market and crystallise substantial value for Mecom shareholders. In addition and importantly, I am delighted to say that we have agreed with A-pressen that we will continue to operate Sweetdeal together in Norway. We have also agreed that we plan to explore opportunities for co-investing in and exploiting digital product development. This alliance will benefit both companies and maintain links with the great team at Edda Media. The sale will of course materially improve our balance sheet. It will allow us to consider, in due course and subject to a refinancing, an enhancement to the Company’s cash returns to shareholders, to focus on our future strategy and to invest to improve profitability in the remainder of the Group.”
Thor Gjermund Eriksen, Chief Executive of A-pressen, said: “A-pressen and Edda Media are a perfect fit for future success. The acquisition will strengthen both A-pressen and Edda Media in today’s challenging media market. Together with Edda Media, A-pressen becomes a solid media group with strengthened financials for joint development. The reinforcement is crucial for the long-term commitment to develop and build the Norwegian media industry. A-pressen has long and proud traditions to protect publishing values and editorial freedom. Edda Media’s traditions, fundamentals and editorial independence will of course be respected and retained.”
Norway, Oslo & UK, London
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