Monday 6th March 2006
|Text too small?|
Trade Me's owners will also receive up to an additional $50 million over the next two financial years subject to the attainment of additional earnings targets.
Trade Me accounts for more than 60% of New Zealand's web traffic. The purchase price is approximately 15.6 times expected 2007 EBITDA.
Trade Me is a privately-held company, founded by Sam Morgan.
Morgan and other key executives will remain with the company.
The transaction, which is subject to final verification of due diligence and regulatory approval under the New Zealand Overseas Investment Act, is expected to close in April.
"Trade Me is an outstanding internet success story, and holds the leading position online in New Zealand in just about every category," Fairfax chief executive David Kirk says.
"The business has a phenomenally strong position with its huge audience, and will continue to grow its auction and classified businesses because of this."
"The acquisition of Trade Me reshapes Fairfax's earnings and business mix as part of our more aggressive push into the internet in all the markets in which we operate. As a result of our successful online investments, we are now a significantly more diversified media company.
"The strong revenue and earnings performance of Fairfax Digital in Australia, together with today's acquisition of Trade Me in New Zealand, and other online opportunities that we are pursuing, are coming together to give Fairfax a higher growth profile.
"We intend to operate Trade Me just as it is - as a standalone, highly dynamic business on its own high growth trajectory. Trade Me has well established plans for future expansion, and we will support the management to see them successfully implemented. The business will have the benefit of a joint advisory board drawn from current Trade Me directors and Fairfax executives.
The purchase will be funded through a combination of hybrid equity (40%) and senior debt (60%). The company will shortly launch a Step Up Preference Security for approximately A$250 million through an offer to institutional and sophisticated investors. The senior debt of approximately A$375 million will be provided through a 364 day committed bridge facility which will be refinanced during 2006.
No comments yet
17th September 2021 Morning Report
NZ Automotive Investments Limited (NZX: NZA) Proposed Sell Down by NZA Founder to Improve Liquidity
16th September 2021 Morning Report
15th September 2021 Morning Report
Seeka Limited (NZX: SEK) Announces Further Kiwifruit Acquisition
Briscoe Group Limited (NZX: BGP) Half Year Results Announcement
14th September 2021 Morning Report
Stride Property Ltd & Stride Investment Management Ltd (NZX: SPG) Office Fund Established and Conditional Acquisition
Third Age Health Services Limited (NZX: TAH) Announces Acquisition of Belmont Medical
13th September 2021 Morning Report