Three things about the $93 million Clear Channel Switzerland sale which was announced yesterday.

The price is OK. 

The sale price of 9.75 times segment cashflow is OK.  For a wide variety of out of home transactions, Billboard Insider assumes 10 times segment cashflow as an average price. More than 10 times segment cashflow is a good price and less than 10 times segment cashflow is a below average price.  Clear Channel Outdoor got 12.5 times cashflow when it sold a large group of US out of home assets to Lamar in 2016.

The sale won’t reduce leverage

Clear Channel execs said on the last round of earnings calls that the sale of international assets won’t be deleveraging.  Billboard Insider expects that most of the $93 million sale proceeds will be applied against the $375 million in bonds issued against Clear Channel’s international assets.  As you can see from the table below the sale leaves Clear Channel Outdoor leverage almost unchanged – and still too high.

But there’s one less distraction

The sale removes a distraction from management and allows the company to focus on faster growing and high margin US assets.

Clear Channel Outdoor stock closed down 0.5% on a day when Outfront rose 0.2%, Lamar declined 0.4% and the Standard and Poors 500 declined 1.4%.

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