Infratil sells iSite to Australia's QMS Media for $49 mln

Tuesday 1st December 2015

Infratil, the listed infrastructure investor, has sold its advertising subsidiary iSite to Australian media company QMS Media for $49 million.

iSite provides a third of New Zealand's commercial outdoor advertising, with 450 static billboards and a growing portfolio of digital billboards, as well as 1500 buses nationwide, and was valued at $18 million as at Sept. 30. Chief executive Marko Bogoievski told BusinessDesk the company was pleased with the sale.

"That management team's done a good job at positioning that business for that type of outcome," Bogoievski said. "It's been a business that has been exposed to media cycles - this is probably a good time to offer it up for sale and I think the right people have bought it."

ASX listed QMS Media yesterday announced a trading halt after the market closed, pending an announcement of a material transaction and associated capital raising by the company. A spokesperson for QMS said the company was not able to comment while the trading halt was in place, but it would make an announcement today.

The Australian Financial Review today reported QMS Media was raising A$50.3 million to fund the acquisition, with A$44.4 million to pay for iSite. The capital raising comprised a one for five accelerated non-renounceable pro rata entitlement offer to raise A$41 million at a A$1 a share, and a retail entitlement offer to raise another A$9.3 million, according to the report.

The deal is expected to settle on Dec. 10, with net proceeds "dependent on post-closing adjustments," Infratil said.

iSite contributed $5.2 million to Infratil's earnings before interest, tax, depreciation, amortisation and fair value adjustments in the year ended March 31.

Last month, Infratil's Bogoievski told an investors' briefing that the company is sitting on cash reserves of $755 million following the recent sale of its remaining 20 percent stake in Z Energy for a $392 million gain, and has $1 billion, including undrawn bank facilities, for planned spending on existing assets and to take advantage of opportunities that might arise.

QMS listed on the ASX in June, raising A$90 million through an initial public offering of 138.5 million shares priced at 65 Australian cents. The ASX listed shares last traded at A$1.19.

In its annual report presented in October, the Melbourne based company said it was an "exciting time" for outdoor advertising, with digital accounting for 24 percent of total outdoor revenue, and it was looking to expand market coverage in New Zealand.

Infratil shares increased 0.3 percent to $3.08 on the NZX today, and have gained 4.3 percent this year.

BusinessDesk.co.nz

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