Infratil sells iSite to Australia's QMS Media

Infratil [NZX: IFT] has sold its advertising subsidiary iSite to Australian media company QMS Media for $49 million.

ISite provides a third of New Zealand's commercial outdoor advertising, with 450 static billboards and a growing portfolio of digital billboards, as well as 1500 buses nationwide.

It was valued at $18 million as at September 30. Chief executive Marko Bogoievski told BusinessDesk the company is pleased with the sale.

"That management team's done a good job at positioning that business for that type of outcome," Mr Bogoievski says.

"It's been a business that has been exposed to media cycles - this is probably a good time to offer it up for sale and I think the right people have bought it."

The Australian Financial Review (AFR) has reported QMS Media is raising $A50.3 million to fund the acquisition, with $A44.4 million to pay for iSite.

The capital raising comprised a one-for-five accelerated non-renounceable pro rata entitlement offer to raise $A41 million at a $A1 a share, and a retail entitlement offer to raise another $A9.3 million, according to the AFR.

The deal is expected to settle on December 10, with net proceeds "dependent on post-closing adjustments," Infratil says

ISite contributed $5.2 million to Infratil's earnings before interest, tax, depreciation, amortisation and fair value adjustments in the year ended March 31.

Last month, Infratil's Mr Bogoievski told an investors' briefing the company is sitting on cash reserves of $755 million following the recent sale of its remaining 20% stake in Z Energy for a $392 million gain, and has $1 billion, including undrawn bank facilities, for planned spending on existing assets and to take advantage of opportunities that might arise.

QMS listed on the ASX in June, raising $A90 million through an initial public offering of 138.5 million shares priced at 65Ac. The ASX-listed shares last traded at $A1.19.

In its annual report presented in October, the Melbourne-based company said it was an "exciting time" for outdoor advertising, with digital accounting for 24% of total outdoor revenue, and it was looking to expand market coverage in New Zealand.

Infratil's shares increased 0.3% to $3.08 on the NZX today, and have gained 4.3% this year.

(BusinessDesk)