MediaWorks and QMS Media Limited have announced the completion of the merger of QMS Media Limited’s New Zealand out-of-home, digital media and production business (QMS NZ) and MediaWorks’ radio, TV and digital business. The merger establishes a new multi-platform media company.
With the merger completed, QMS will hold a 40 percdnt interest in the combined New Zealand business, with funds managed by Oaktree Capital Management L.P. (Oaktree) holding a majority 60 percent shareholding.
QMS will hold two seats on the five-member board with Wayne Stevenson (QMS chairman) and Barclay Nettlefold (QMS managing director and group CEO) appointed as directors, effective immediately.
QMS is receiving a capital return of A$38.0 million which will be used to repay part of the company’s banking facility.
The merged entity has also entered into an unconditional agreement to acquire ETC Media’s premium Christchurch digital billboard portfolio, adding twelve large format digital billboards, to its existing national digital portfolio. This acquisition will further extend its large format digital network now encompassing Auckland, Wellington, Christchurch, Whangarei, Hamilton, Tauranga, Rotorua and New Plymouth.
MediaWorks chairman Jack Matthews said the addition of QMS’ out-of-home business will give MediaWorks an unparalleled portfolio of assets to deliver results for customers.
Nettlefold added the merged QMS NZ and MediaWorks business will be the first in 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.
“The merger will deliver compelling value for advertisers and maximise cross-platform revenue synergies for the business.
“For QMS, the merged business remains a substantial ongoing investment in the New Zealand market where the combined capabilities of QMS NZ and MediaWorks can build on their existing market positions to drive future revenue growth. The merger and capital return realise value for QMS shareholders, better positioning the company to take advantage of compelling future investment opportunities as they arise.”
The merger was proposed in November last year.
Last month, QMS Media reported its revenue was up 23 percent to $128.9 million, with a gross profit up 85 percent to $90.5 million for the first six months of 2019.
And in May, MediaWorks’ FY 2018 results showed a net loss after tax of $5.5 million, which moved the company closer to profitability.
The merger with QMS will now have a significant impact on that performance but MediaWorks’ chief executive Michael Anderson told StopPress in May, MediaWorks won’t have the ability to leverage the combination of TV, radio, digital and out-of-home until 2020. He said the rest of 2019 will be about bringing the two companies together.