Media Prima Bhd. · MYX:MEDIA
Media Prima Bhd — Merger or Acquisition (November 2006)
37 slides from Media Prima Bhd's merger presentation, November 2006
Slide 1: Consolidation of Media Prima Outdoor Strategy: Proposed Acquisition of UPD and The Right Channel
1 MEDIA PRIMA BERHAD CONSOLIDATION OF MEDIA PRIMA OUTDOOR STRATEGY: PROPOSED ACQUISITION OF UPD AND THE RIGHT CHANNEL ANALYSTS BRIEFING NOVEMBER 2006
Slide 2: Contents
CONTENTS 2 Section 1 Group strategy and strategic direction of Media Prima outdoor business Section 2 Proposed acquisition of Big Tree Outdoor as “Anchor” entity Section 3 Proposed acquisition of UPD and The Right Channel Section 4 Proposed transaction structure and value Section 5 Conclusion
Slide 3: Group Strategy and Strategic Direction of Media Prima Outdoor Business
3 SECTION 1 GROUP STRATEGY AND STRATEGIC DIRECTION OF MEDIA PRIMA OUTDOOR BUSINESS
Slide 4: Group Expansion Plan – CREaM Strategy
GROUP EXPANSION PLAN – “CREaM” STRATEGY 4 Complete Media Platform Regionalization Strategy • Radio • Acquire airtime via revenue share • Outdoor arrangement HIGH • Consolidation of domestic TV • Acquire / Operate / Manage TV stations station in Indonesia:- (a) National TV Station; or Impact on Finan
Slide 5: Business Model for Expanded Outdoor Business
BUSINESS MODEL FOR EXPANDED OUTDOOR BUSINESS 5 Identify an outdoor company that fits the role of the “anchor” and build the outdoor business by acquiring under performing assets to enhance value Single Marketing Team Anchor entity Consolidated Backroom Operations Target 2 TARGET 1 ANCHOR Synergy wit
Slide 6: Proposed Acquisition of Big Tree Outdoor as the Anchor Entity
6 SECTION 2 PROPOSED ACQUISITION OF BIG TREE OUTDOOR AS THE “ANCHOR” ENTITY
Slide 7: Big Tree Outdoor as the Anchor Entity
BIG TREE OUTDOOR AS THE “ANCHOR” ENTITY 7 On 20 November 2006, Media Prima announced the proposed acquisition of 70% equity stake in Big Tree Outdoor (BTOC) for consideration of RM97.2 million: • Big Tree Outdoor (BTO) is the leading outdoor advertising outfit in Leading Outdoor Malaysia. Company •
Slide 8: Strong Financial Track Record
STRONG FINANCIAL TRACK RECORD 8 • BTO is a profitable entity with stable • Protected by long term increase in revenue and profitability revenue based from mid to long term concessions • EBITDA margin is in excess of 40% higher 2004 2005 than current margin for MPB of 27% for FYE 2005 RM '000 % % Dis
Slide 9: Concessions
CONCESSIONS 9 A sample of the concessions and concession period: Concessionaire Expressway PLUS Expressway Berhad NSE, NKVE and Federal Highway Route 2 ELITE Sdn Bhd ELITE Penang Bridge Sdn Bhd Penang Bridge Linkedua (M) Berhad Linkedua Projek Lintasan Kota Sdn Bhd The Ampang – Kuala Lumpur Elevated
Slide 10: Acquisition at Highly Attractive Price
ACQUISITION AT HIGHLY ATTRACTIVE PRICE 10 RM million EV / EBITDA PER Nav is 81.0 Company Country (times) (times) M inority shareholders 16.2 Seni Jaya Malaysia 1.25 13.89 P urchase consideration 97.2 Equity stake acquired 70% Lamar Advertising US 16.11 149.36 Enterprise value 138.9 Clear Channel US
Slide 11: Proposed Acquisition of UPD and The Right Channel
11 SECTION 3 PROPOSED ACQUISITION OF UPD AND THE RIGHT CHANNEL
Slide 12: Background - UPD
BACKGROUND - UPD 12 • UPD Sdn Bhd (“UPD”) is owned by Utusan Melayu One of the largest (Malaysia) Bhd group of companies (Utusan Group) outdoor outfit • Estimated revenue of RM9 m for 2006 • Owns over 2,400 active outdoor advertising panels located across the nation, giving wide coverage for adverti
Slide 13: UPD's Revenue Base
UPD’S REVENUE BASE 13 MPB believes that there is a strong potential from the acquisition of UPD from its existing revenue base. UPD’s STAR LRT sites and inner city sites in Klang Valley alone have the following annual revenue generating potential based on management’s estimates: Sites RM'm STAR LRT
Slide 14: UPD Billboards
14 UPD BILLBOARDS
Slide 15: UPD Billboards
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Slide 16: UPD Billboards
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Slide 17: UPD Transit
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Slide 18: UPD Transit
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Slide 19: UPD Transit
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Slide 20: UPD Street Furniture
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Slide 21: UPD Street Furniture
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Slide 22: UPD – Financials
UPD – FINANCIALS 22 R M ’ 000 F YE 31 D ec 2004 2005 Revenue 18,582 9,149 Operating expenses (18,942) (6,534) EB ITDA after EI 3,745 225 PBT 1,060 (3,201) PAT 1,060 (2,525) P aid-up o rdinary capital (‘ 000) 2,128 2,128 Shareho lders’ deficit (12,284) (14,809) To tal bo rro wings ^ 394 418 Gearing r
Slide 23: Background – The Right Channel
BACKGROUND – THE RIGHT CHANNEL 23 • The Right Channel (“TRC”) is a small outdoor outfit which Small outdoor is wholly owned by The New Straits Times Press company (Malaysia) Berhad (“NSTP”) • MPB owns 43.3% of NSTP • TRC owns concession over ERL train Concessions on • Also own concession on retail a
Slide 24: TRC Products
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Slide 25: TRC – Financials
TRC – FINANCIALS 25 RM’000 FYE 31 Dec 2004 2005 Revenue 2,737 2,018 Operating expenses (2,790) (1,750) EBITDA after EI (1,472) (301) PBT (2,137) (1,096) PAT (2,137) (1,940) Paid-up ordinary capital (‘000) 5,000 5,000 Shareholders’ deficit (2,478) (4,418) Total borrow ings^ - - Note: ^ Total external
Slide 26: Proposed Transaction Structure and Value
26 SECTION 4 PROPOSED TRANSACTION STRUCTURE AND VALUE
Slide 27: Proposed Transaction Structure
PROPOSED TRANSACTION STRUCTURE 27 • The summary of the total transaction is as follows:- Company No. of shares % Purchase acquired acquired Consideration (RM) UPD 2,128,000 100 1.00 TRC 5,000,000 100 1.00 2.00 • As part of the transaction, UPD and TRC shall repay shareholder advances (owing to Utusa
Slide 28: Post Turnaround Acquisition at Attractive Price
POST TURNAROUND ACQUISITION AT ATTRACTIVE PRICE 28 UPD TRC Equity stake acquired (%) 1.00 1.00 Purchase consideration (RM) 1.00 1.00 Limit on the net liabilities position of each company (RM'm) 11.0 3.5 Implied Enterprise Value 11.0 3.5 EBITDA (RM'm) 2006 (E) 0.8 0.3 2007 (E) 5.0 1.4 EV / EBITDA (ti
Slide 29: Value Enhancing Deal
VALUE ENHANCING DEAL 29 The proposed acquisitions of UPD and TRC are value enhancing to MPB based on the estimates for 2007 as follows:- Proforma Based on 2007 Estimates Total Total % Outdoor RM'million BTO UPD TRC Outdoor MPB Combined of MPB Revenue 65.0 13.0 3.0 81.0 578.0 659.0 14.0% EBITDA 25.0
Slide 30: Potential Impact of FRS3
POTENTIAL IMPACT OF FRS3 30 • FRS3 Business Combinations could have an impact on earnings as a result of the acquisition of UPD & TRC • A potential impact of FRS3 is the possible recognition of a portion of the goodwill arising from the acquisition as intangible assets. These intangibles are require
Slide 31: Rationale of Acquisition
RATIONALE OF ACQUISITION 31 Consolidate • Acquisition of UPD and TRC will consolidate Media Prima’s leading position in position as the leading provider of out-of-home advertising Outdoor solutions • Using BTO as the “Anchor” entity, the consolidation will Streamlining back streamline the backroom f
Slide 32: Rationale of Acquisition
RATIONALE OF ACQUISITION 32 Transaction at fair • Post acquisition EV/EBITDA for 2007 estimated at 2.20 and value – post 2.50 respectively acquisition at attractive multiple • Comparable with multiples of other outdoor companies • Purchase consideration at RM1 for each UPD and TRC. Minimum cash outf
Slide 33: Media Prima Group Structure – Post Acquisition
MEDIA PRIMA GROUP STRUCTURE – POST ACQUISITION 33 Television Content Events Print Media Radio Outdoor Broadcasting Creation Management 100.0% 100.0% 43.3% 75.0% 100.0% 100% 80% 100.0% 100.0% 70.0% 100% 100%
Slide 34: Conclusion
34 SECTION 5 CONCLUSION
Slide 35: Applying the Outdoor Business Model
APPLYING THE OUTDOOR BUSINESS MODEL 35 Big Tree is the “anchor” in consolidating outdoor business - managing under performing assets to enhance value Single Marketing Team Anchor entity Consolidated Backroom Operations Synergy with MPB’s other media platforms
Slide 36: Conclusion
CONCLUSION 36 • With the acquisition, MPB will complete its traditional media platform line-up. • BTO, UPD and TRC will enhance MPB’s earnings and provide the ability for further expansion into the outdoor business. • MPB’s earnings will also be diversified, with the more stable earnings of BTO, UPD
Slide 37: Thank You
THANK YOU EB LJNSTP Berita Harian TIGAEVENTS {AMEMBER OF MEDIA PRIMA GROUP] SON BAD {8 OER OF MEDIA PRIMA GROUR) prima 7 7 J Right Channel STRAITS TIMES Howie METRO {Me Fy For Gm tebit banget daripade biave
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