Here There & Everywhere is buying regional radio broadcaster Grant Broadcasters for $307.5m ($283m in cash and $69m in scrip) at $1.93 a share. It is the company’s first foray into the regional market.
Credit Suisse views the multiple as high for a private company and says any accretion would arise from the realisation of the $20m revenue targeted as part of the transaction, which should be achievable.
The broker appreciates the stability of the acquisition and adjusts earnings estimates to include the purchase from FY22 onwards; and to reflect the company’s trading update which revealed slower growth.
FY22 EPS estimates rise 30% in FY22. Target price is steady at $2.50. Outperform rating retained.
Sector: Media.
Target price is $2.50.Current Price is $1.90. Difference: $0.60 – (brackets indicate current price is over target). If HT1 meets the Credit Suisse target it will return approximately 24% (excluding dividends, fees and charges – negative figures indicate an expected loss).
