OUTFRONT shares increased 8% this week following news that the OUTFRONT is selling OUTFRONT Canada to Bell Media for $300 million US.  Three things about the sale.

Stock purchase

The transaction is a purchase of the shares of OUTFRONT Canada, not a purchase of assets.  This carries more risk for Bell Media because it steps into any liabilities of OUTFRONT Canada.  A stock purchase is generally more tax advantageous for a seller. The purchase involves 9,325 displays including 4,596 digital displays.  That’s 2% of OUTFRONT’s total displays.

15 times cashflow multiple

Looks to Billboard Insider like the transaction is at 15 times cashflow multiple assuming a purchase price of $300 million and cashflow (OIBDA) of $20 million for the Canadian assets for the 12 months ended June 30, 2023.

The transaction reduces OUTFRONT leverage slightly

If cash from the sale is applied against debt the transaction will reduce OUTFRONT’s leverage from 6.02 times to 5.61 times as you can see from the table below.

Billboard Insider’s take:  The high sale multiple is a win but OUTFRONT has a ways to go to get leverage (Debt/Cashflow) down to its 4:1 target.

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