Corus Buys Shaw Media
January 13, 2016 at 11:36 AM (PT)
CORUS ENTERTAINMENT INC. has announced that it it buying rival Canadian media conglomerate SHAW MEDIA, INC. for C$2.65 billion -- C$1.85 billion in cash and C$71 million in CORUS Class B shares. The move, financed by RBC CAPITAL MARKETS, will result in CORUS owning the GLOBAL television network, 39 radio stations, 15 TV stations, 45 cable networks, animation studio NELVANA, and digital and content studio assets.
The combined companies generated about C$1.9 billion in revenue for 2015, with C$619 million in adjusted EBITDA and C$430 million in free cash flow; the companies project about C$40-50 million in annual cost synergies from the merger within 24 months. CORUS will redeem its 4.25% senior unsecured notes due February 2, 2020 at closing, with C$550 million principal presently outstanding.
"This is a transformational acquisition that redefines CORUS and CANADA's media landscape," said CORUS President/CEO DOUG MURPHY. "This game-changing transaction brings together a powerful portfolio of synergistic media assets that will solidify CORUS' position as the market leader in the highly valued Women, Kids and Family segments. It will also advance our strategic priorities through investment in content creation for our own platforms, and for global markets.
"The time is right to unite these two strong media companies. With the addition of SHAW MEDIA, we will have the competitive scale, the brands, the content and the team to accelerate our growth. We are also pleased to announce that BARBARA WILLIAMS, currently EVP/Broadcasting and Pres., SHAW MEDIA, will join CORUS in a senior leadership capacity upon the closing of the transaction. As one of the industry's most-respected executives, BARBARA will play an integral role shaping the new CORUS, given her in-depth knowledge and exceptional leadership capabilities, as we bring our people and assets together."
"We are confident that this transaction will create great value for our shareholders," said CORUS Board of Directors Special Committee Chairman FERNAND BÉLISLE. "We are buying SHAW MEDIA at an attractive price, financing it prudently and the transaction is immediately accretive on an earnings and free cash flow per share basis. This combination will deliver strong free cash flow which will allow the company to de-lever quickly while maintaining its current dividend."
"We believe these two companies will form a winning combination. Their complementary mix of assets and strong management teams fit extremely well together," said SHAW COMMUNICATIONS INC. Exec. Chair JR SHAW. "This transaction represents an exciting new chapter and allows us, as a family, to participate in what we see as a very successful future for CORUS, one that will support a vibrant Canadian broadcast system."
"This is a pivotal transaction that will create one of CANADA's leading integrated media and content companies, with the scale and media assets to succeed in the new regulatory environment," said SHAW CEO BRAD SHAW. "Our significant investment in the new CORUS demonstrates our commitment to the success of this powerful combination."
SHAW MEDIA owns GLOBAL and its VANCOUVER, OKANAGAN, EDMONTON, CALGARY, LETHBRIDGE, SASKATOON, REGINA, WINNIPEG, TORONTO, MONTREAL, HALIFAX and SAINT JOHN.affiliates, and cable channels FOOD NETWORK CANADA, HGTV CANADA, DIY NETWORK CANADA, SLICE, LIFETIME, HISTORY CANADA, H2, SHOWCASE, NATIONAL GEOGRAPHIC CANADA, NAT GEO WILD CANADA, ACTION, MOVIETIME, IFC CANADA, GLOBAL NEWS: BC1, BBC CANADA, DEJAVIEW, CRIME + INVESTIGATION, DTOUR and FYI.
Corus Fiscal First Quarter Revenues Up, But Not For Radio
CORUS also released its fiscal first quarter 2016 financial results TODAY, showing consolidated revenues up 1% to C$228.3 million, with consolidated segment profit up 3% to $95.9 million. Radio revenues, however, fell 2% to C$44.6 million. Net income attributable to shareholders fell from C$51.9 million to C$41.3 million (60 to 47 cents per share basic and diluted).
"Our solid results for the first quarter underscores our commitment to deliver growth in fiscal 2016," said MURPHY. "The launch of DISNEY CHANNEL (CANADA) and the optimization of our portfolio of Kids brands across platforms drove growth in subscriber, merchandising, production and distribution revenues during the quarter. Our transformational acquisition of SHAW MEDIA, announced this morning, will create a powerful combination of media assets that will give us the scale, brands, content and team to succeed in a rapidly evolving media landscape."
In addition, the company announced that its board has declared monthly dividends of C$0.094583 per Class A Share and C$0.095 per Class B Share payable on each of FEBRUARY 29th, 2016, MARCH 31st, 2016 and APRIL 29th, 2016 to shareholders of record at the close of business on FEBRUARY 15th, 2016, MARCH 15th, 2016 and APRIL 15th, 2016, respectively.