If you read our lead article today, you will know that Clear Channel has not sold their assets in France, but have entered into exclusive discussions with a Company called Equinox Industries for the sale of their French assets.  A little unusual to have a press release that tells you “we are talking”, but from the release, we are assuming both parties feel fairly certain that there is the basics for an agreement. So, our first questions is, who is Equinox Industries?

Equinox Industries is a French company with their headquarters in Paris. Founded in 1999 Equinox is an industrial holding company that invests private equity money  in a non hostile and consensual way (per their web site) in businesses faced with turnaround, restructuring or shareholding issues. Their money is used to finance a restructuring (redundancy plan, creditors’ buyouts), a growth scenario (capital expenditures, working capital requirements), as well as a buyout of existing shareholders. Equinox typical investment ranges from €5 millions to €30 millions in established sound businesses operating in profitable industries or niches. They primarily focus on business to business opportunities with a preference for service companies.

Equinox look for high return investments. They say those opportunities are often found in turnaround or restructuring situations. Their goal is to provide their portfolio companies and their management teams with the financial means and tools needed to realize their ambitions in order to together create and share value.

They look for companies that have a proven business model, have attracted clients through a sound product or service offering and that have demonstrated a certain level of financial profitability. Equinox focus includes over-leveraged buyouts, underperforming businesses as well as straight shareholders’ buyouts.

So how does Clear Channel France fit for Equinox and what is Clear Channel’s rationale? While Clear Channel Outdoor does have France separated out for marketing purposes (you can see that web site here), Corporately, CCO does not report France individually, but as a part of what they call their Southern Europe territory, which has included France, Switzerland (sold to Goldbach Group this year), Spain and Italy (both sold to JCDecuax in 2003), leaving France as the remaining  segment in Southern Europe.

If you look at the Southern segment of Europe as compared to other CCO territory, here is what you get for 2022:

This 2022 chart does include all four countries we mentioned and, of their four business segments above, southern Europe contributes the least and, after Capex, contributed no cash to the business.  If you are wondering if 2022 was an aberration, here is a table for the last three years.

So if CCO reaches agreement on this final asset sale, it will mean in 2023 they could achieve completed sales of their weakest performing segment.  While Insider thinks it makes sense for Clear Channel to sell all their European assets, starting with the sale of your weakest performing group is a very sound strategy.

Still have to get the France sale to the finish line, but this also seems, at the right price, to be a terrific opportunity for Equinox that checks a lot of their boxes.

Stay tuned, we will keep you updated.

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