Ten Network sold EYE Corp to oOh!media

Ten Network Holdings has sold its outdoor advertising business Eye Corp to CHAMP Private Equity-owned oOh!media for $145 million.

The deal covers see all of Eye’s Australian and New Zealand businesses, as well as its Unites States, United Kingdom and Indonesian operations.

The sale price comprises a cash of up to $120 million on the completion of the deal, and a deferred consideration of $25 million payable in three years time.

“The final cash proceeds will be subject to adjustments in respect of the sale proceeds of the US and UK operations, as set out below, and for agreed working capital levels, capital expenditure obligations, and transaction costs,” Ten said in a statement.

Under the agreement, parts of of Eye’s Australian contracts will be retained by Ten, but the operation of relevant assets will be subcontracted to oOh!media.

The net value of these onerous contracts is thought to be about $16 million.

Ten said it would use the proceeds of the sale to pay off some of its debt, strengthen its balance sheet, and provide financing flexibilit

OMO plans to sell the US and UK operations of EYE to interested third parties.Should a deal not be struck, the agreement allows Ten to reacquire the assets if it wishes.

“Ten will have an economic exposure to the outcome of the sale of the US and UK operations and, until sold, the funding of those operations,” the company said.

The deal comes two months after Ten and CHAMP entered exclusive negotiations on Eye Corp, and four months after Ten launched a company-wide strategic review.

Eye Corp’s revenues fell seven per cent in the first half of the 2012 financial year, while earnings dropped 36 per cent.

At 1615 AEST official market close, shares in Ten had risen 1.98 per cent to $51.50 against a benchmark index fall of 0.18 per cent.