Reports: Private Equity Eyeing Distressed Media Assets, With Seven, oOh!media & SCA All Possible Targets
As the coronavirus continues to take its toll on Australia’s media landscape, there are reports suggesting private equity firms are keeping an eagle eye on the situation in the hopes of snapping up a local bargain.
As reported in The Australian, investment firm Kohlberg Kravis Roberts (KKR) and buyout fund Silver Lake Partners are two privateers who may be looking to buy distressed Australian media companies.
Media companies trading at lower than normal prices and could be ripe for the picking include Seven West Media, oOh!media, Southern Cross Media Group and Prime Media Group.
It’s been reported Silver Lake, who purchased Ticketet owner TEG from Affinity Equity Partners for $1.3 billion in 2019, is holding current discussions potential sales in the local Australian market.
However, according to The Oz, it may only be discussions around securing sports rights locally rather than acquisitions.
Meanwhile, KKR, which was understood to be interested in acquiring QMS Media last year, is also said to be keeping an eye on Australia’s media landscape in search of bargain deals.
Australian media’s struggle
The coronavirus pandemic has increased the distress of several Australian media companies, most notably Seven West Media.
SWM has been struggling for some time now, laden with debt now four times its actual value. And now, the spread of COVID-19 appears to have hit SWM harder than most, forcing widespread cost-cutting across the business.
The AFL has played heavily on the network’s bottom line, with a number of ad sales people forced out the door. Furthermore, the Olympics, which were due to start this month, have been moved 12 months and have left a gaping hole in Seven’s content slate.
The broadcaster sold its publishing arm Pac Mags to Bauer for a cool $40 million earlier this year, however, that will do little to balance the books.
Last week, it was reported Seven CEO James Warburton is considering offloading the business’ Seven West Ventures, which includes stakes in digital companies Airtasker, Health Engine and SocietyOne. It was reported Seven West Ventures could earn as much as $100 million if it were to find a suitable buyer.
As a result of Seven’s woes, there’s been increasing industry speculation that Seven West Media is for sale. There’s had long been rumours that News Corp was a possible buyer, however, those rumours have subsided amid COVID-19.
Yet as privateers circle Australia’s media landscape, Seven West Media could very well be on its way to striking a deal.
Other suitable media companies trading at lower than normal prices could include oOh!media, which in March this year revealed a $167 million equity raising following a trading halt. Furthermore, oOh! had $355 million net debt at the end of last year.
Southern Cross Media Group and Seven-owned Prime Media Group have also been named as potential opportunistic sales.
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