Subject category:
Strategy and General Management
Published by:
IBS Research Center
Length: 19 pages
Data source: Published sources
Topics:
Clear Channel Communications Inc; Private equity; Bain Capital Partners LP; Thomas H Lee Partners LP; HCA (Hospital Corporation of America); Sungard Data System; US radio industry; Podcast; Digital broadcasting; High definition; Snapple Beverage Group; Mezzanine capital; Leveraged buyout; Telecommunications Act 1996; CBS Outdoor
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Abstract
On 16 November 2006, Clear Channel Communications Inc, the biggest US radio station owner, agreed to be acquired for US$18.7 billion by an investor group led by Thomas H Lee Partners LP and Bain Capital Partners LLC. The media giant planned to sell 448 of its radio stations, all located outside the top 100 markets as well as its 42-station television group, located in smaller markets. Collectively, the properties made up less than 10% of the company''s revenues in 2005. Clear Channel owned and operated 1,150 radio stations and also retained a majority stake in Clear Channel Outdoor, the worldwide outdoor advertising specialists. Under the terms of the deal Thomas H Lee Partners LP and Bain Capital Partners LLC would assume US$8 billion of Clear Channel Communication''s debt, taking the overall takeover price to US$26.7 billion. The investment group had competition from another consortium made up of Providence Equity Partners, Blackstone Group and Kohlberg Kravis Roberts (KKR). According to some analysts, the tremendous long-term growth opportunities of Clear Channel Communications in both the radio and outdoor business would create value for the private equity groups. The case presents the buyout history and the synergies arising from the acquisition for both the groups. The case further deals with the emergence of private equity firms as the ''maverick investors'' and the recent flush of mergers and acquisitions by them.
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Abstract
On 16 November 2006, Clear Channel Communications Inc, the biggest US radio station owner, agreed to be acquired for US$18.7 billion by an investor group led by Thomas H Lee Partners LP and Bain Capital Partners LLC. The media giant planned to sell 448 of its radio stations, all located outside the top 100 markets as well as its 42-station television group, located in smaller markets. Collectively, the properties made up less than 10% of the company''s revenues in 2005. Clear Channel owned and operated 1,150 radio stations and also retained a majority stake in Clear Channel Outdoor, the worldwide outdoor advertising specialists. Under the terms of the deal Thomas H Lee Partners LP and Bain Capital Partners LLC would assume US$8 billion of Clear Channel Communication''s debt, taking the overall takeover price to US$26.7 billion. The investment group had competition from another consortium made up of Providence Equity Partners, Blackstone Group and Kohlberg Kravis Roberts (KKR). According to some analysts, the tremendous long-term growth opportunities of Clear Channel Communications in both the radio and outdoor business would create value for the private equity groups. The case presents the buyout history and the synergies arising from the acquisition for both the groups. The case further deals with the emergence of private equity firms as the ''maverick investors'' and the recent flush of mergers and acquisitions by them.