LONDON (Alliance News) – Vitec Group PLC on Wednesday said it has sold its US broadcast services business to NEP Group Inc for a total gross consideration of USD35.0 million.
Vitec Broadcast Services Inc, known as Bexel, has been sold to NEP’s subsidiary, NEP Supershooters LP. The consideration is equal to about GBP26.5 million.
Bexel provides premium outsourced broadcast services and rental equipment focused on the US sports, entertainment and live event production markets. The unit generated USD64.2 million of revenue in 2016 to make an adjusted operating loss of USD1.9 million. Gross assets at the end of 2016 stood at USD37.6 million.
“The disposal represents a further step in the transformation of the group and supports Vitec’s stated aim of improving operating margins,” said the company.
Once completed, Bexel’s net assets are expected to stand at around USD25.0 million. Vitec noted that Bexel remained loss-making in the first half of 2017, with the aim of breaking even at the operating level in the second half.
The disposal is expected to improve Vitec’s margins and return on capital employed, and it said the deal will be neutral to its 2017 adjusted earnings per share.
The net cash proceeds of the sale is estimated to be USD32.0 million, or GBP24.2 million, and will be used to reduce debt.
Halid Hatic, who was senior vice president of Bexel, will remain at Vitec to assist with the growth of the Broadcast unit in the US.
Vitec will release its half-year results on August 10.
Vitec shares were down 1.4% on Wednesday at 1,004.00 pence.
By Joshua Warner; firstname.lastname@example.org; @JoshAlliance
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