QMS Media Limited (ASX: QMS) has announced that it has entered into a Heads of Agreement for a proposed merger of its New Zealand out-of-home, digital media and production business (QMS NZ) with MediaWorks, New Zealand’s leading independent radio, TV and digital business. MediaWorks is New Zealand’s largest independent broadcaster and reaches more than four million New Zealanders through its TV, radio and digital platforms. The company is owned by funds managed by Oaktree Capital Management, L.P, a global investment management firm headquartered in Los Angeles and governed by a Board of Directors; Jack Matthews (Chairman), Jonas Mitzschke and MediaWorks CEO Michael Anderson.
The transaction is subject to agreeing final binding terms as well as several customary conditions and is expected to complete in the second quarter of CY 2019.
Proposed Transaction Highlights
• The proposed merger would see QMS merge its NZ out-of-home, digital media and production businesses into MediaWorks and in return will receive a material but not controlling share of the company in the expanded MediaWorks business, with funds managed by Oaktree Capital Management, L.P retaining a majority.
• Transformational multi-media provider across four platforms, delivering the combined power of out-of-home, radio, TV and digital, with a strong localised presence and experienced leadership.
• The proposed combined sales network will maximise revenue synergies and deliver strong cash
flow to the group.
• The transaction is subject to agreeing final binding terms as well as several customary
conditions and is expected to complete in the second quarter of CY 2019.
The proposed merger of QMS NZ and MediaWorks would create the largest multi-media group in New Zealand, a first in this market to realise the combined power of out-of-home, radio, TV and digital as an unrivalled destination for advertisers to build brands and maximise audience reach. This future view of the media industry is consistent with recent international trends that place additional significant value on the power of multi-media ownership.
We are told that the proposed merged group would deliver compelling value for advertisers via an expanded sales network and complementary cross-stream revenue synergies.
Wayne Stevenson, Chairman of QMS Media Limited told us “New Zealand is important to our business and we are excited about the potential opportunity to create a leading multi-media group that will transform the New Zealand advertising industry”.
QMS is being advised on this transaction by CLSA and Chapman Tripp.