Stingray Acquires Newcap in $500 Million Foray Into Radio
The deal for Canada's No. 2 private radio company "represents a considerable milestone for Stingray -- positioning us as Canada's largest public independent media company -- and a valuable opportunity for our stakeholders."
Montreal-based Stingray Digital Group Inc. is getting into the terrestrial radio business in a half-billion-dollar (CAD) acquisition of Newfoundland Capital Corporation Limited, announced to shareholders late Wednesday (May 2) afternoon.
Newcap, which is headquartered in Dartmouth, Nova Scotia, holds 101 licences (82 FM and 19 AM) in seven provinces -- 72 local radio stations and 29 repeating stations, also available on web and mobile. It employs about 800 radio personnel, is the No. 2 private radio broadcaster in Canada (by number of stations, after Bell) and No. 3 by revenue. Stingray employs 400 in Canada and abroad.
Stingray currently includes specialty television channels and multiplatform music and video services, and among the many benefits and synergies outlined in the announcement will "accelerate Stingray's mobile subscriber growth, a new channel to promote Stingray's SVOD products and specialty TV channels."
The Transaction is valued at approximately $506 million, including the assumption of a net debt of approximately $112 million as at December 31, 2017, it says in the comprehensive announcement issued by Stingray. The deal is expected to close by the end of 2018, "but no later than May 2, 2019," according to Stingray.
"This transaction with NCC comes after months of careful review," said Stingray co-founder, president and CEO Eric Boyko in a statement. "It represents a considerable milestone for Stingray -- positioning us as Canada's largest public independent media company -- and a valuable opportunity for our stakeholders.
"We have found in NCC an established and trusted partner wit. h a proven track record of delivering results in niche markets across the country. I am excited to expand Stingray's operations into radio broadcasting and bring on board some of Canada's most popular on-air talent and an experienced sales force, which will help us grow our revenue streams. I look forward to welcoming the NCC team to the Stingray family and collaborating with the current management in place."
Rob Steele, chairman, president and CEO of NCC, told the Western Star that he has known Boyle for more than a decade and his brother has been on the board of Stingray for five or six years . He said he will now concentrate on his Steele Hotels.
In a prepared statement included in the Stingray press release, he said, "Today marks the start of an exciting chapter for NCC. By joining forces with Stingray, we are of the view that the synergies will allow our business to move towards even greater success. Together, we have begun to build a solid foundation for Canada's next great media group. We expect that our combined company will stand out in today's fiercely competitive market for its world-class talent and complementary service offering. On behalf of NCC's management and Board of Directors, I am thrilled NCC is joining the Stingray family."
Upon closing of the deal, Steele will step down and Ian S. Lurie will continue to assume leadership responsibilities for Stingray's new radio operations.