Eye deal about right for the...

Eye deal about right for the sector

http://www.afr.com/p/opinion/eye_deal_about_right_for_the_sector_kl778wMCDBd5yExTop2FTP

Edited by Sarah Thompson and Anthony Macdonald

Ten Network Holdings’ $113 million sale of outdoor advertising business Eye Corp was priced in line with other deals in the sector, according to JPMorgan analyst Jarrod McDonald.

Ten and CHAMP Private Equity signed the $113 million deal on Wednesday night, which will deliver $98 million upfront to Ten and another $15 million in three years’ time. The transaction is expected to complete quickly.

Based on Eye Corp’s reported $11.6 million earnings before interest, taxation, debt and amortisation for the year to August, the deal priced Eye Corp at 9.7-times trailing earnings.

JPMorgan’s Jarrod McDonald said it was consistent with Quadrant Private Equity’s purchase of a 50 per cent stake in APN Outdoor and CHAMP’s acquisition of oOh!Media.

In a statement last night, Ten said the final cash proceeds were worth close to Eye Corp’s book value.

It said proceeds would be used to pay down debt.

Ten recently reported net debt-to-equity of 2.8-times for the 2012 financial year and 3.2-times interest cover.