Nine Entertainment to take over Fairfax media in estimated A$4BN deal

Nine EntertainmentAustralia’s Nine Entertainment is to take over Fairfax Media, for an estimated A$4 billion. The television network will take a controlling 51.1% stake in the newly merged company, which will be renamed NEC, or Nine Entertainment Company. Nine will acquire all of Fairfax’s shares and take a controlling 51.1% share in the new business, which will be called NEC. Under the terms of the proposed transaction, Fairfax shareholders will receive 0.3627 Nine shares for each Fairfax share held and $0.025 cash. It represents a 21.9% premium to Fairfax’s closing share price of 77c on 25 July 2018.

Hugh Marks of Nine will be the new chief executive and Peter Costello, the Nine chairman, will now lead the board of the new business.

Costello said, “Both Nine and Fairfax have played an important role in shaping the Australian media landscape over many years. The combination of our businesses and our people best positions us to deliver new opportunities and innovations for our shareholders, staff, and all Australians in the years ahead.”

Marks added, “The ground-breaking merger – harnessing the strength, assets, quality and reach of two of the country’s most famous industry brands – is another highly significant step in the evolution of Nine’s business into one of the most powerful media organisations in the country. The scope of this deal is genuinely quite breathtaking. In addition to our existing television and digital businesses, the new NEC will also become the proprietor of the iconic Fairfax mastheads as well as the new majority owner of Domain (60%) and the Macquarie Radio Network (54.5%)“.

Fairfax Chief Executive Officer Greg Hywood said, “The proposed transaction for Fairfax reflects the success of Fairfax’s transformation strategy which has created value for shareholders through targeted investment in high growth businesses, such as Domain and Stan, and prudent management of our media assets. The combination with Nine provides an exciting opportunity to continue to drive incremental value well into the future. We are confident that the strength of the combined management team and staff will ensure the continuation of our quality journalism.”

Australia, Sydney

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Kew Media completes acquisition of Essential Media Group

Kew Media GroupProduction and distribution firm Kew Media Group has completed the previously reported acquisition of the Essential Media Group.

The Essential Media Group is the newly formed international content company from the merger of two leading independent production companies and joint venture partners – Essential Media and Entertainment and Quail Entertainment. Headed by CEO and Executive Producer Chris Hilton and CCO and Executive Producer Greg Quail, EMG combines strong credentials and track records in both scripted and unscripted content.

Steven Silver, Kew Founder and CEO, said, “The addition of Essential to the Kew platform is another step forward in our growth strategy. It expands Kew’s US offering and gives us a first presence in Australia. We anticipate strong revenue synergies coming from Essential’s inclusion for 2019.

Canada, Toronto & USA, Los Angeles, CA

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 Ascential acquires WARC for £24M

ascentialMedia and events business Ascential plc has acquired WARC Limited for an initial cash consideration of £19.5m, plus deferred consideration of £4.5m payable in 2019.  The acquisition is expected to complete on 2 July 2018.

WARC is a digital subscription business that helps brands, agencies and media platforms assess marketing effectiveness across all channels.  It provides information and insight to understand and measure multi-channel advertising effectiveness.  Founded in 1985, the business offers advertising best practice, evidence and insights from the world’s leading brands.  The business employs approximately 90 people with offices in London, Washington DC and Singapore and serves approximately 1,200 customers globally. 

In the year to 31 March 2018 WARC generated unaudited revenue of £10.8m (a growth of 10%) and EBITDA of £2.2m.  Gross assets at 31 March 2018 were £9.6m

Duncan Painter, CEO of Ascential, commented: “Ascential enables its customers to win in the digital economy.  WARC is an important step forward as we continue to grow our digital offering, adding breadth and depth to our marketing proposition.  Alongside Cannes Lions’ The Work, our recent digital product launch, we will now have a digital subscription product of scale encompassing both creative excellence and marketing effectiveness.”

UK, London

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Kew Media Group to acquire Essential Quail Media Group

Kew Media GroupKew Media Group Inc. has agreed to acquire Essential Quail Media Group for an initial purchase price of AUD$32.8 million (C$31.9 million based on the current CAD/AUD FX rate of approximately 0.972), comprised of AUD$20.0 million (C$19.4 million) in cash and AUD$12.8 million (C$12.4 million) in Class B shares of KEW valued at C$10.00 per share.

EQ Media combines several entities with aggregate pro forma revenue of over AUD$60 million (C$58 million). The initial purchase price represents a transaction multiple of approximately 3.2x EQ Media’s estimated Adjusted EBITDA of AUD$10.2 million (C$9.9 million) for its fiscal year ending June 30, 2018. The cash portion of the initial purchase price will be funded through cash on hand and KEW’s credit facilities. The vendors may receive additional consideration in the future, conditional upon EQ Media meeting certain financial targets and other tests, which are described below.

EQ Media is a leading independent producer of high quality content for international audiences operating from offices in Los Angeles and Dallas-Fort Worth in the U.S. and Sydney, Australia. EQ Media produces content in a variety of genres, particularly non-scripted television series, for broadcast customers worldwide. Buyers of EQ Media’s programming include DIY, HGTV, Cooking Channel, Animal Planet, ABC Australia, SBS, Foxtel Networks 7, 9 & 10, BBC, National Geographic, PBS, Discovery, Sundance, History Channel, Arte, Netflix and Fox Network. EQ Media also has a longstanding relationship with Scripps Networks (now part of Discovery Inc.), producing more than a dozen full series orders and pilots together.

Steven Silver, KEW Founder & CEO, said, “EQ Media is an exciting addition to the KEW group and the transaction purchase price is an attractive valuation for such a prominent content producer. We expect the acquisition to be immediately accretive to earnings and to free cash flow. In addition, we expect to generate meaningful synergies from the sale of additional EQ Media content through KEW’s global distribution platform.”

Canada, Toronto & USA, Los Angeles, CA

Byron Allen’s Entertainment Studios Inc. acquires The Weather Channel

Entertainment StudiosEntertainment Studios, one of the largest independent producers and distributors of film and television with nearly 160 million aggregate subscribers across the US, has acquired The Weather Group, parent company of The Weather Channel television network and Local Now streaming service. Byron Allen, founder and owner of Entertainment Studios, purchased the Weather Group through his company, Allen Media LLC, from The Blackstone Group, Bain Capital, and Comcast/NBC Universal.

The Weather Channel is one of the largest cable television networks not owned by a major conglomerate and is the nation’s only 24-hour source of national storm coverage. Harris Poll has ranked The Weather Channel as the “TV News Brand of the Year” for eight years in a row. The network recently launched a community platform, weloveweather.tv, to create a two-way dialogue with fans.

Allen said, “The Weather Channel is one of the most trusted and extremely important cable networks, with information vitally important to the safety and protection of our lives. We welcome The Weather Channel, which has been seen in American households for nearly four decades, to our cable television networks division. The acquisition of The Weather Channel is strategic, as we begin our process of investing billions of dollars over the next five years to acquire some of the best media assets around the world.”

USA, Los Angeles, CA & Atlanta, GA

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Keshet acquires majority stake in Greenbird Media

Keshet InternationalKeshet International, the global production and distribution arm of Israeli media giant Keshet, has acquired a majority stake in UK production company incubator, investor and biz accelerator Greenbird Media. The deal sees Keshet up its share of Greenbird and take over BBC Worldwide’s 30% stake in the company. Further details of the transaction were not disclosed.

Greenbird, a venture from Shine TV executive Jamie Munro and Stuart Mullin from Argonon, was founded in 2012 and provides independent producers with access to innovative funding models and licensing deals to support their creative productions.

KI, known for “Homeland,” “The A Word” and “Rising Star,” will become distribution partner for Greenbird Media’s production companies and boost its roster with more entertainment and factual content, while Greenbird will continue to guide its independent producers in terms of funding and licensing deals for creative productions.

Alon Shtruzman, CEO of Keshet International, said, “Greenbird Media, with its entrepreneurial and creative culture, is the perfect match for us. We share similar philosophies and values, and by combining KI’s global footprint with Greenbird Media’s stellar team, I see limitless possibilities and accelerated growth.”

Israel, Jerusalem & UK, London

 

Newsquest to acquire regional media company CN Group

NewsquestNewsquest Media Group Ltd. is to acquire Cumbrian-based media company CN Group in a deal which is part of a larger, scaled operation by the board to better protect the long term future of the group, its staff and its pensioners. The business sold two of its local radio stations to Global Radio in the autumn. The terms of this transaction were not disclosed, but it is expected to complete shortly after shareholders meet on 9th March.

CN Group runs print, digital and event brands covering Cumbria, Northumberland, north Lancashire, and the Scottish Borders including several award-winning papers such as the News & Star, Cumberland News, Times & Star, The Whitehaven News, The Mail and Hexham Courant.

It also has a magazine division that includes Cumbria Life, Taste Cumbria, Bay Living, in-Cumbria, Dumfries and Galloway Life, runs the Choose Cumbria marketing campaign, and events arm CN Events and a print division. It employs 324 people.

Henry Faure Walker, Newsquest chief executive, said: “We look forward to the opportunity of working with the CN Group, its staff and the community it represents in building on their great local brands and publishing expertise, and helping them forge a strong future. We will endeavour to support them with the scale and resources that Newsquest can provide, whilst enabling them to carry on what they have done so well for many years – namely providing first class content and advertising solutions for the people and businesses of Cumbria and the wider region.”

UK, Weybridge & Carlisle

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