West Australian Newspapers has bought regional West Australian broadcast group, RedWave Media, for $11.7 million (subject to due diligence).
RedWave Media operates AM and FM radio licences in the North West towns of Karratha, Port Hedland and Broome, and also has a licence covering the remote mining towns of WA.
The Managing Director of West Australian Newspapers, Ian Law told radioinfo: “RedWave Media was a logical add-on to the existing print operations of the company.”
“We operate newspapers in these areas now and believe there will be solid economic growth in the North West region over the next decade. We believe we understand these markets and see good prospects for their growth in the future.”
The acquisition is the newspaper company’s first investment in radio and “is part of the group’s plan to expand across the media sector.” WA News is on the record as saying it does not plan to bid for new broadcasting licences, but is interested in acquisitions of existing media businesses such as this deal.
Commenting on the business structure of the RedWave group Law said: “RedWave Media is an excellent stand alone business with two strong independent networks covering these remote areas. It operates the Star Network and the WA FM network as separate entities with the core programming done out of Perth and the local content produced at each regional centre.”
The management team at RedWave Media, including the General Manager, Sales Manager Program Manager and other staff will continue under the new ownership. Law said there is no plan to change the operational structure of the company.
In a statement that reflects the spirit of the government’s stalled new media legislation Law said: “Our intention in Broome, Karratha and Port Hedland where we also have free regional newspapers is to continue to run the radio stations as separate business entities.”
Law expects the purchase of RedWave Media will be “marginally Earnings Per Share accretive from the first year (2003/04). The investment also passes our hurdle rates in terms of the Internal Rate of Return on the funds invested.”