Here's a quick, cut-to-the-chase breakdown of the ownership structure of both CTV Inc. and The Globe and Mail if the deal goes through:
- BCE will own 100 per cent of CTV
- Woodbridge Company Ltd., the financing holding company of the Thomson family will own 85 of The Globe and Mail, and BCE will own the remaining 15 per cent
In short, BCE is paying $1.3-billion for the 85 per cent of CTV it currently doesn't own. The total enterprise value of CTV is $3.2-billion -- $1.5-billion of equity value and $1.7-billion of debt.
The payment amounts to 9.9 times CTV's EBITDA.
BCE will pay for all of this with $2-billion of committed debt financing (plus some surplus cash) and $750-million of new BCE shares for Woodbridge. There will also be a rollover of $200-million of BCE's specialty notes.
The new credit facility matures in May, 2013, but $600-million of the new facility may be combined with BCE's current facility that operates on a permanent revolving basis.
With the new debt, BCE's leverage moves to 2.0 times adjusted EBITDA.
Currently, BCE has $11-billion of net debt, which will bump up to $13.3-billion after the deal closes. Moody's already confirmed that BCE's Baa1 rating will not change.
BCE said the deal will be "immediately, modestly" accretive to both earnings per share and cash flow per share. The company also said the deal should enhance its dividend growth model.
The deal is expected to close not later than mid-2011.