Yesterday OUTFRONT Media closed the sale of Canadian out of home assets to Bell Media.   Here is an analysis of the OUTFRONT Canada sale sponsored by SignValue.

It makes OUTFRONT’s financials easier to understand

The sale makes OUTFRONT a domestic US business.  No currency risks and easier to evaluate and understand.

It creates a $80-90 million capital gain

At the JP Morgan Global Technology, Media and Communications Conference earlier this month, OUTFRONT CEO Jeremy Male said the Canadian sale will create an $80-90 million capital gain.   OUTFRONT must distribute 90% of net operating income so this means there will be an additional cash dividend or distribution of additional stock to shareholders of approximately 50 cents a share later this year.

It reduces OUTFRONT leverage by a quarter turn

The Canadian sale is at a healthy 13 times cashflow multiple so will reduce OUTFRONT’s total leverage below 6:1.  Here’s our estimate of how the sale will reduce OUTFRONT’s leverage using full year 2023 revenue, cashflow (OIBDAN) and debt.  Everything is millions.

SignValue’s Take:  The deal helps OUTFRONT better focus attention on their domestic US business, but will obviously have a marginal effect on their debt ratio.

SignValue can be reached at (480) 657-8400 or info@signvalue.com for a confidential consultation.

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