Pacific Star Network Ltd (ASX:PNW) has completed its merger with Crocmedia Pty Ltd.
Crocmedia is a Melbourne-based content and entertainment business connecting brands to audiences across TV, radio, online and events.
As a result of the merger, Crocmedia’s co-founder and CEO Craig Hutchison was appointed as the CEO and managing director of Pacific Star.
Merger builds on broadcasting and publishing business
Excluding the Crocmedia merger, Pacific Star is a Melbourne-based media company with interests in broadcasting and publishing.
It owns two Melbourne AM commercial broadcasting licenses and broadcasts 24/7 on 1116 SEN and Classic Rock Radio.
Pacific Star also operates three digital-only radio stations.
The company expanded into publishing in December 2014 through the acquisition of Morrison Media Services Pty Ltd.
Morrison Media publishes Frankie, Spaces, Smith Journal, Slow Living, and SEN Inside Football.
Merger creates multi-platform media company
The merger creates a sports, entertainment and lifestyle content business of scale with complementary services across multiple media platforms.
Crocmedia’s core business is radio syndication, with 34 radio shows and over 130 hours of content produced weekly.
It has an estimated potential audience base of 20.5 million listeners representing about 85% of the Australian population.
Crocmedia has multiyear radio broadcasting rights to Australian Football League (AFL), National Rugby League (NRL) and Football Federation of Australia (FFA) games.
Merger expected to be earnings accretive
The merger is expected to increase earnings per share (EPS) by 44% on a pro forma trailing twelve month period to 31 October 2017 basis for Pacific Star shareholders.
A minimum $3.0 million pro forma cost synergies (excluding restructuring costs) have been identified in addition to potential revenue synergies not yet quantified.
The combined group pro forma revenue and EBITDA is over $48 million and $10 million respectively, including identified pro forma cost synergies, for the trailing twelve month period to 31 October 2017.