ARN acquires Grant Broadcasters for $307 million

ARN has just moved beyond being a capital city broadcaster with its acquisition of Grant Broadcasters, announced this morning.

The acquisition now gives ARN’s parent company HT&E  greater coverage across Australia by adding smaller state capitals and regional stations.

ARN will need to sell 4KQ to comply with ownership requirements.

This news will mark the coming together of Australia’s #1 metro radio network, ARN, and Australia’s oldest, family-run regional radio company, Grant Broadcasters, giving advertisers the potential to reach over 90% of Australians nation-wide.

With an acquisition that includes radio and digital operations across 46 Grant’s stations, the partnership will significantly scale up ARN’s already robust business. When combined with ARN’s existing 13 stations, ARN will now own 58 stations across 33 markets plus 46 DAB+ stations – resulting in a presence in every state and territory in Australia and an accelerated rollout of ARN’s established iHeartRadio digital audio platform into regional areas.

Strategically, this transaction fits very well for the growth ambitions of both businesses, allowing expansion of audience bases and fast-tracking the delivery of digital audio content and advertising opportunities across the whole of Australia. The combined network will deliver innovative, digitally enabled commercial solutions at scale and will enable the provision of nationally integrated commercial partnerships for clients, giving them the ability to access more than a third of Australian consumers in one transaction.

HT&E MD and ARN CEO Ciaran Davis said; “It is rare that an asset of this quality and strategic fit to our existing portfolio becomes available and we are excited by the opportunities presented by the coming together of these two great businesses.

“The station brands Grant Broadcasters have created have served their local communities with great commitment for decades, playing a pivotal role in the lives of their audiences, and we look forward to continuing that tradition.

“As the leading metropolitan audio network and leading regional radio network come together, our commitment to live and local content is completely unwavering. It means that through the voices of talent that local markets know and love, ARN will connect via multi- platform content across a broadcast and digital distribution network reaching more than 8 million people. It presents an appealing proposition for our clients,
listeners, staff and shareholders alike.

“The recent successful resolution of HT&E’s tax matter with the ATO for $71m, and the gain of $31m on the divestment of our OML stake, significantly strengthened our balance sheet as we prepared for this transaction. Our disciplined approach to capital management and creation of shareholder value is further demonstrated by the accretive nature of this transaction that is being funded through existing cash reserves, financing facilities and the issuance of new shares to Grant Broadcasters.”

Alison Cameron, CEO of Grant Broadcasters said: “For 80 years Walter Grant, his daughter Janet Cameron and her family have been operating regional radio stations that serve local communities in regional Australia. We are so very proud of the connection the stations have with those communities and of our staff for continuing that commitment.

“Both our companies are profitable enterprises in their own right but this partnership will deliver scale, digital acceleration, and ensures our future profitability.”

Ciaran Davis explains; “4KQ is a station rich in history and a hugely important part of the ARN story and we are sorry to see it leave the network. Laurel, Gary & Mark, Brent and the rest of the 4KQ team have been an incredible asset for the business and it is regrettable that to achieve growth for ARN, we are required to divest the station.”

The sale is worth $307.5m. Of that, 22.5% of the purchase consideration will be delivered to Grant Broadcasters in HT&E shares, equating to an ~11% holding in HT&E, with Grant’s current CEO Alison Cameron joining the HT&E Board and current COO Rick Lenarcic joining ARN’s Executive Leadership Team.

Alison Cameron has told Radiotoday that jobs will be safe in the former Grant Broadcaster stations. “We had discussions about that with Ciaran during the merger and I know that ARN is not looking at sackings… Their philosophy is that our family will become part of their family.”

Regulator ACMA will consider this acquisition a ‘trigger event’ which will require the new owner of the stations to keep staffing at the same levels as it is today for two years.

Ciaran Davis says the stations are run well with a good profit margin of about 35%, so this is not an acquisition process where there is fat to trim. “They have a live and local strategy like us, we have a similar philosophy, so we think this will work well for everyone… we are not looking to cut costs, we are looking to expand revenue by increasing advertising to national advertisers.”

The Radio Sales Network (TRSN) has also been acquired by ARN as part of the deal, as has the land, buildings and transmission equipment associated with each station. Alison Cameron will join the board of HT & E, while other members of the family will continue to be involved in radio through the Geelong station’s company Geelong Broadcasters and some remaining stations, held jointly with Kevin Blyton’s company Capital Radio.

The acquisition is funded by $238 million from HT&E’s cash reserves, the recent sale of HT&E’s stake in oOH Media and the company’s existing debt facility. Grant Broadcasters will also gain shares in HT&E with a value of $1.93 per share.

The deal is expected to complete on 30 November.

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Mike
12 Nov 2021 - 10:57 am

Not sure this is good news. Big shareholder company taking over family run business will inevitably mean downsizing local markets, more networking and less jobs in the radio industry. It may not happen straight away but it will happen.

Regional just lost
12 Nov 2021 - 3:53 pm

Regional radio in Australia just went sausage factory SPAM in one “foul” swoop.

That's right
12 Nov 2021 - 3:57 pm

Mike is right . Just another nail in the coffin and there’s plenty in it already. Most of the FM dayshifts have been getting voiced tracked for a while and the AM’s announcers aren’t being replaced. They didn’t buy Zetta because it looks pretty.

Reg
12 Nov 2021 - 3:59 pm

Gawd… no sooner is it announced than all the wingers and naysayers come out of the woodwork. Get some perspective.

Companies have to be big to survive now days. If that has to happen I would rather work for a company that knows radio like ARN than have it swallowed up someone else.

I work in regional Australia, I want my town to have a good radio station.

Be real
12 Nov 2021 - 5:01 pm

Face it… Grant’s would not survive the next few years of radio. No digital strategy and no on-demand to be seen. A lot of stations didn’t even stream, do podcasts or even acknowledge life outside of an FM frequency.

“Local radio” would have died a worse death if it didn’t have big companies with investment in future ways of consumption. At least SOME jobs stay in this capacity and not all when a company with no future plan inevitably folds because technology and new habit works them out of the game.

Just a regional radio pleb
12 Nov 2021 - 5:45 pm

Would have been good if the email making the announcement went to staff before Kyle announced it on air. Not great to be getting a call from people in Sydney telling me the news before my own company did.

SEQ radio listener
12 Nov 2021 - 6:32 pm

Seeing that ARN has to sell KQ, maybe SEN might buy them like they did with 2CH . Just a thought.

Anonymous
12 Nov 2021 - 6:34 pm

4KQ is a great station in Brisbane (I listen to it everyday) and I just hope the new owners don’t wreck the station and the current format which is very successful. hopefully owners like ACE Radio or Capital Radio buy 4KQ and retain the current format & programs or it becoming a locally owned & operated station. I don’t want SEN buying the station otherwise I will be switching to 4BH and my Spotify Playlist for music.

It will be ok
12 Nov 2021 - 6:38 pm

ARN, out of all three metro FM networks is the one regionals would want to be owned by. Until several years ago the internal culture was that of a large regional station and there is still a legacy of that. Management love radio and they’ll do the right thing – or at least as much as the balance sheet will allow.

No Surprises
12 Nov 2021 - 8:53 pm

ARN are slowly turning into SCA. But never will be as good.

Matt Bone
12 Nov 2021 - 10:48 pm

River will go from the most community focused commercial station to what ever is

They compete so well without actually competing, against Toowoomba, Brisbane and the gold coast,

Joined up it’s all screwed

Live and local will be a meme in 12 months

Matt Bone
12 Nov 2021 - 10:52 pm

Formats between 973 and River…?

I feel River will die touched by a network rather than be left alone to do is own thing like it has for the last decade or so.

JASON ANDREW TOPPIN
13 Nov 2021 - 5:16 pm

ANONMYOUS
4BH IS NOW ON 1116AM AND AS OF 2022 EARLY THEY WILL BE OWNED BY ACE RADIO NETWORK A VICTORIAN REGIONAL RADIO COMPANY THAT ALSO OWNS 3MO MELBOURNE AS WELL TGEY WIKL OWN 2UE SYDEY AND MAGIC 1278 MELBOURNE
THOUGHOUT I WPUKD TELL YOU THIS TODAY AND ANY OTHER 4KQ LISTENERS THAT MAY BE WORRRIED ABOUT SE BUYING 4KQ. SEN BEED S TRNGER UER ON THE AM BAND AND 683V MAY BE A GREAT PLACE FOR S[ORT IN BRISBANE.

AussiGuy58
14 Nov 2021 - 10:26 am

ARN had to get bigger or they would be subject to a takeover. Personally see this as a good fit for them. If they keep the call signs and programming local with a mix of networking shows they will do well. Networking state news would be one place to go.

Matt Bone
14 Nov 2021 - 12:26 pm

ARN might take the opportunity to rename river’s call sign so they can name 973 mixfm.
Marnie and Campo will be again employees of their prior. Since they can from 973.

If Ace buy 4kq, they’ll have one classic hits station and one easy listening station.

With huge ratings for an am station, they’d be fools to mess with KQ

Zzzzzzzzzz
14 Nov 2021 - 1:22 pm

Shows the downside of private ownership by someone that is just interested in milking a business for an obvious future sale. Nova Entertainment has fallen asleep at the wheel

Rhye
14 Nov 2021 - 3:26 pm

Good move from ARN. Strong and now the most reach audio company. Pay day for Grants!
Side note, loving the approach from this website. It’s not street gutter gossip but correct, factual stories. Well done to the new owners.

@Matt Bone
15 Nov 2021 - 10:10 am

River 949’s call sign is 4MIX which is why 973 can’t use the Mix name.

James
15 Nov 2021 - 1:37 pm

Will ARN transfer the Muswellbrook stations to the Newcastle market. SCA needs competition which it doesn’t get from Bill Carilis?

Joey
15 Nov 2021 - 3:38 pm

One poasibility is 4KQ will be picked up by Nova Entertainment.

Surely Nova have something to offer that ARN would desire – 100% of Brisbane 97.3fm.

4KQ fits very nicely into Nova’s older-skewed offering, with Smooth covering Syd/Mel and 5AA covering Adelaide.

Woule very suprised if this discussion between parties did not occur before the likes of Ace or Capital got a look in.

I cannot see how you easily alter the formats of 4KQ and River.

Whoever owns 4KQ is surely mad to mess with its formula. An AM music station at the top of the ratings…well it works in Brisbane at least.

While River is sub-metro at best. Its calling is to be wide appeal and ultra-local.

Simon
15 Nov 2021 - 8:57 pm

I’m with Be Real on this one! It’s unbelievable that Grants got to 2021 still stuck in the Dark Ages (right down to most of the station logos). But I hope ARN do a better job being local than SCA. Surely one of the first things to go will be the Nova drive programs, replaced by Will & Woody, and Kyle & Jackie O?

Oh well
16 Nov 2021 - 9:48 am

So many exciting things coming out of SCA, ARN and Nine, all listed entities blazing into the distance…

I agree with previous comments, wake up Nova time to do something new and get people excited by you again

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