QMS Media today unveiled its plans to undertake a strategic realignment within the organization to achieve further growth in the future. The news comes after QMS Media Limited (ASX: QMS) had announced the merger of its New Zealand’s out-of-home, digital media and production business with New Zealand’s leading television, digital and radio business, MediaWorks.
For the merger, the company has decided to adopt the segmentation approach where three distinct business segments will be formed to simplify QMS’ overall business. QMS Media stated these three segments would include QMS Media, Media Works, and QMS Sport.
QMS Chairman, Mr. Wayne Stevenson stated that taking MediaWorks transaction in consideration, strategic realignment will provide a significant opportunity to evaluate the portfolio performance while providing accretive value to shareholders.
Today’s announcement read that QMS Media will be a premium quality digital out-of-home segment, MediaWorks will function as a leading multi-media company in New Zealand, and QMS Sport will present the integrated worldwide digital sports technology, media rights, and infrastructure business. The company believes these segments will provide the extensive understanding of the company’s portfolio value to the investment community.
In the recently announced merger, QMS told that it would receive 40% shareholding in MediaWorks post-merger while remaining 60% will be retained by fund manager Oaktree Capital Management, L.P. Further, QMS is reported to hold two seats in expanded MediaWorks’ Board and Oaktree will hold three.
Following this merger, the company aims to deliver A$12.8 million contributions from QMS NZ to QMS Media Limited group in Fiscal 2019. QMS will also be entitled to receive a capital return of approximately $35 million subject to the finalization of financing terms. Moreover, the company currently underway a thorough analysis of alternatives available for QMS’ sports business so that it can explore all the local as well as international growth opportunities.
Mr. Stevenson stated that the Board has made it a priority to evaluate the competitive advantage of QMS Media to add flexibility of funds along with providing financial clarity and future growth opportunities. The company has appointed CLSA Australia to undertake the review of alternatives available for the Sports business.
In the early trade today, QMS Media has been trading at lower levels however it closed flat on 14 December 2018. Its last traded share price is $0.910 with the price to earnings ratio of 16.250x with the market capitalization of $296.47 million. In the past one year, the stock has fallen by 8.08% while in the last three months it is down by 5.70%.
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