APN buys out Clear Channel’s share of ARN

APN News and Media Limited will acquire full ownership of Australian Radio Network and New Zealand’s The Radio Network from U.S. joint venture partner Clear Channel Communications for $246.5 million.

The transaction will give APN 100% of “the largest network of radio stations in the trans-Tasman region.”

APN CEO Michael Miller has told radioinfo the deal moved quickly in recent weeks: “We have been working with our Clear Channel partners for many years and have had many conversations about this, but in recent months the deal moved very quickly.”  The buyout reflects a price of 6.9 times EBITDA, which Miller says was “an attractive purchase price.”

In an upbeat message for the whole radio industry, Miller classifies radio as being among the company’s “growth assets.” He says radio audiences “are large and growing” with “radio ad spending being resilient.”

“Our objective is to be the undisputed leader in radio,” he told radioinfo, citing a new attitude in the Australian Radio Network and NZ’s TRN. While ARN has contributed positive results to APN’s bottom line in recent years, TRN has been less successful, but Miller says “no significant changes” are expected at TRN as a result of the acquisition. “We love radio and we want TRN to continue doing a good job,” he said, emphasising the point that APN is “no longer just a print business, it is a media business.”

Miller says the deal “transforms” APN: “The majority of our earnings are now in businesses which have been consistently growing and have considerable further upside. It also gives us flexibility to pursue new revenue generating opportunities across our portfolio of businesses… We believe that radio will continue to grow as a medium and that ARN will continue to capture a greater share of the market. ARN has one of the best management teams in the business and with no management changes planned there won’t be any disruption to day-to-day operations.”

ARN owns or has investments in 12 radio stations in Sydney, Melbourne, Brisbane, Adelaide, Canberra and Perth. Through brands such as KIIS 1065, MixFM, Classic Hits & The Edge it broadcasts to over four million listeners each week. TRN operates seven core radio brands across New Zealand.

As part of the transaction, APN has secured an exclusive ten-year arrangement with Clear Channel to operate and broadcast the iHeartRadio digital radio platform in Australia and New Zealand. APN also has the exclusive option to act as implementation partner for iHeartRadio in parts of Asia.

iHeartRadio is the only free digital music service that combines customised radio stations with live radio streaming from more than 1,000 radio stations across the ARN, TRN and Clear Channel US networks. It was simultaneously launched in Australia and New Zealand in August 2013 and has already secured a leading position with more than 274,000 registered users and 424,000 unique online and mobile visitors, as well as 11.2 million page impressions per month.

Ciaran Davis, Chief Executive of ARN said: “Our clear strategy is to become the number one radio FM network in Australia. Having two of the top-rated Sydney breakfast shows in Kyle & Jackie O and Jonesy & Amanda, very strong and established teams in Melbourne, number one commercial radio stations in Brisbane and Adelaide and now iHeartRadio, results in a huge cumulative impact on the whole ARN network.

This gives us greater traction with advertisers and the confidence that we can continue to build our market share. iHeartRadio not only gives us scope to grow advertising spend per customer in the key 25-54 segment, it also provides us with access to an expanded, younger audience.”


APN issued its full year results for the year ended 31 December 2013 today. ARN delivered revenue growth in 2013 of 6% compared to overall radio market growth of just 2%, and EBITDA up 14% to $58 million.

APN key shareholders, Independent News and Media, Allan Gray and Baycliffe, who together represent more than 50% of the company’s issued share capital, are supportive of the transaction. Miller told radioinfo that while APN’s Irish investors are supportive of the deal, they will not be participating in the capital raising.

View the full results briefing from the ASX site here (click ‘trust’ to view).

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