APN Makes Strategic Radio Play
19 February 2014
APN Makes Strategic Radio Play
APN News & Media Limited (APN) this morning announced that it will acquire full ownership of The Radio Network (TRN) and Australian Radio Network (ARN) from U.S. joint venture partner Clear Channel Communications Inc (Clear Channel) today for $246.5 million. The transaction will give APN 100% of the largest network of radio stations in the trans-Tasman region.
TRN operates seven core radio brands that broadcast to approximately 1.7 million listeners each week across New Zealand, being Newstalk ZB, Radio Sport, Coast, Classic Hits, ZM, Radio Hauraki and Flava. ARN owns or has investments in 12 radio stations in Australia, broadcasting to over four million listeners each week.
Chief Executive Officer of APN, Michael Miller said: “This transforms APN. The majority of our earnings are now in businesses that have been consistently growing and have considerable further upside. It also gives us flexibility to pursue new revenue generating opportunities across our portfolio of businesses.”
“We believe that radio will continue to grow as a medium and that TRN will continue to capture a greater share of the market. TRN has one of the best management teams in the business and with no management changes planned there won’t be any disruption to day-to-day operations,” he said.
As part of the transaction, APN has secured an exclusive ten-year arrangement with Clear Channel to operate and broadcast the iHeartRadio digital radio platform in New Zealand and Australia. APN also has the exclusive option to act as implementation partner for iHeartRadio in parts of Asia.
iHeartRadio is the free only digital music service that combines customised radio stations with live radio streaming from the more than 1,000 radio stations across the TRN, ARN and Clear Channel US networks. It was simultaneously launched in New Zealand and Australia in August 2013 and has already secured a leading position with more than 274,000 registered users and 424,000 unique online and mobile visitors, as well as 11.2 million page impressions per month.
Jane Hastings, Chief Executive of TRN said: “Our clear strategy is to build on our market-leading position and expand our audience base by identifying with younger listeners and growing our digital presence. Securing new talent such as Fletch & Vaughan and Rachel Smalley, refreshing our brands and programs across the network and now iHeartRadio has a huge cumulative impact on the whole TRN network.
“TRNs ability to deliver customised content, digital, activation and on air solutions gives us much greater traction with advertisers and the confidence that we can continue to grow. iHeartRadio not only gives us access to an expanded, younger audience, it also provides us with the scope to deliver new ways for our advertisers to connect with the core 18-54 target audience in a measured way,” she said.
APN issued its full year results for the year ended 31 December 2013 today. TRN delivered revenue growth of 9% against overall radio market growth of 7.7% and EBITDA up 22% to $20 million on a local currency basis.
APN key shareholders, Independent News & Media, Allan Gray and Baycliffe, who together represent more than 50% of the company’s issued share capital, are supportive of the transaction.