Digital billboard company Clear Channel Outdoor has taken a significant step in optimizing its business strategy by agreeing to sell its Europe-North segment to a subsidiary of Bauer Media Group for $625 million. This decision comes as part of Clear Channel's focus on paying down debt and enhancing its operations in America and airports. The financial arrangements in this deal reflect a 6.5-times multiple based on the Europe-North segment's performance for the 12 months that ended on September 30.
The transaction is slated to close in 2025, pending regulatory approvals. Clear Channel Outdoor plans to allocate the net proceeds derived from the sale to fully prepay a $375 million outstanding loan, which was secured last March through its wholly owned subsidiary, Clear Channel International. This strategic move is essential for maintaining operational efficiency and financial health. Remaining proceeds will be directed according to the asset sale provisions of Clear Channel’s existing debts, illustrating an organized approach to managing liabilities. CEO Scott Wells emphasized the importance of this agreement, stating, "This agreement to sell our Europe-North segment is another significant step in the execution of our strategic plan to optimize our portfolio and focus on growing our America and airports segments to organically improve cash flow and reduce leverage on our balance sheet." Investors reacted cautiously to the announcement, as shares of Clear Channel Outdoor closed down 3.5% on Wednesday, marking a decline of approximately 20% over the past year.
Notably, trading in major US exchanges, including the New York Stock Exchange and Nasdaq 100, was suspended on Thursday as a mark of respect for former President Jimmy Carter during a National Day of Mourning. Yvonne Bauer, Chair of the Bauer Media Board, commented on the acquisition, highlighting its potential to strengthen the company’s core media business and bolster its ongoing digital transformation.
"This move broadens our capabilities and strengthens our position as a major player in the highly competitive media industry," she stated. In its latest financial report for the third quarter, Clear Channel Outdoor reported revenue of $559 million, reflecting a 6.1% increase from the previous year, although it remained flat when compared sequentially.
Within its largest segment, America, revenue saw a year-over-year rise of 5% to $292.8 million. Meanwhile, airports generated revenue of $82.3 million, a 9% increase, and Europe-North's revenue gained more than 11% to $166.4 million. The company has adjusted its full-year revenue forecast to a range between $2.22 billion and $2.25 billion, down from a previous upper estimate of $2.28 billion..