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| Bauer buys radio group Orion Media | Bauer buys radio group Orion Media |
| (about 1 hour later) | |
| Magic and Kiss FM owner Bauer has acquired radio group Orion Media in a deal which could potentially be worth more than £40m. | Magic and Kiss FM owner Bauer has acquired radio group Orion Media in a deal which could potentially be worth more than £40m. |
| Bauer, which also owns some of the UK’s best-selling magazines including Heat, Grazia and Bella, will pick up a portfolio of stations in the Midlands that includes Gem 106 and Free Radio. | Bauer, which also owns some of the UK’s best-selling magazines including Heat, Grazia and Bella, will pick up a portfolio of stations in the Midlands that includes Gem 106 and Free Radio. |
| “Free Radio and Gem are influential radio stations in one of the UK’s fastest growing regions,” said Paul Keenan, chief executive of Bauer Media. “It feels a very important part of the country in our city network of stations. I am excited about the growth prospects we see in economies of Birmingham and the West Midlands and Derby, Leicester and Nottingham in the East Midlands. We see these stations as complementary.” | “Free Radio and Gem are influential radio stations in one of the UK’s fastest growing regions,” said Paul Keenan, chief executive of Bauer Media. “It feels a very important part of the country in our city network of stations. I am excited about the growth prospects we see in economies of Birmingham and the West Midlands and Derby, Leicester and Nottingham in the East Midlands. We see these stations as complementary.” |
| The amount of the deal was not revealed but Orion thought to have sold for about £40m. | The amount of the deal was not revealed but Orion thought to have sold for about £40m. |
| Orion’s underlying profits – earnings before interest, tax, depreciation and amortisation – were just £1.91m in 2014, according to the company’s most recent publicly available accounts. | Orion’s underlying profits – earnings before interest, tax, depreciation and amortisation – were just £1.91m in 2014, according to the company’s most recent publicly available accounts. |
| However, the business attracted a number of bidders and a high sale price because of the scarcity of valuable radio assets in the UK not already controlled by a major group. | However, the business attracted a number of bidders and a high sale price because of the scarcity of valuable radio assets in the UK not already controlled by a major group. |
| “We are happy with the economics of the deal,” said Keenan, who would not reveal the price paid. “Orion is a really strongly rooted local ad platform and business. Its audience delivery is really strong and growth prospects look excellent. The fit with Bauer is fantastic.” | “We are happy with the economics of the deal,” said Keenan, who would not reveal the price paid. “Orion is a really strongly rooted local ad platform and business. Its audience delivery is really strong and growth prospects look excellent. The fit with Bauer is fantastic.” |
| The deal could see Bauer, which already handles Orion’s national radio advertising sales, face an investigation by competition regulators. | The deal could see Bauer, which already handles Orion’s national radio advertising sales, face an investigation by competition regulators. |
| Related: Bake Off star Mel Giedroyc joins Magic Radio ahead of digital launches | Related: Bake Off star Mel Giedroyc joins Magic Radio ahead of digital launches |
| “This acquisition essentially brings into our business a local radio operation in the Midlands,” said Keenan. “We have one FM licence in the region that we broadcast Absolute Radio on. Absolute is essentially a national service; Orion is a significant local platform. From a competition standpoint, my view is there is no change in the competition landscape.” | “This acquisition essentially brings into our business a local radio operation in the Midlands,” said Keenan. “We have one FM licence in the region that we broadcast Absolute Radio on. Absolute is essentially a national service; Orion is a significant local platform. From a competition standpoint, my view is there is no change in the competition landscape.” |
| Orion Media was formed in 2009 by Phil Riley with backing from private equity group Lloyds Development Capital, which took a 49.9% stake. | Orion Media was formed in 2009 by Phil Riley with backing from private equity group Lloyds Development Capital, which took a 49.9% stake. |
| The station’s management is set to benefit from the sale with Riley holding a 17% stake and Adrian Serle, the chief executive, owning 3%. | |
| The group reported revenues of £15.7m and a pre-tax loss of £1.06m in the year to 30 September 2014. | |
| “Orion has established market-leading status for audiences and revenues in each of its markets, something our teams should be immensely proud of,” said Serle, who is expected to leave the business after a transition period with Bauer. “We are extremely confident that the business will continue to thrive under Bauer’s ownership.” | “Orion has established market-leading status for audiences and revenues in each of its markets, something our teams should be immensely proud of,” said Serle, who is expected to leave the business after a transition period with Bauer. “We are extremely confident that the business will continue to thrive under Bauer’s ownership.” |
| Bauer has been on the acquisition trail since Capital-owner Global Radio, the biggest commercial radio group in the UK, won the £70m bidding war for Smooth owner GMG Radio in 2012, then the third-biggest group in the UK. | |
| Having been outbid, Bauer has looked to build scale by buying smaller players including paying £22m for Absolute Radio and several million for digital radio station Planet Rock, both in 2013. | Having been outbid, Bauer has looked to build scale by buying smaller players including paying £22m for Absolute Radio and several million for digital radio station Planet Rock, both in 2013. |