Townsquare Repurchases The Entirety Of Oaktree's Ownership Stake

Rhea-AI Summary

Townsquare Media, Inc. (TSQ) announced the repurchase of Oaktree Capital Management's 12.6 million shares and warrants at $6.40 per security, totaling $80.4 million. This transaction represents a 39% discount to the closing price on March 9, 2021, and is projected to be accretive to earnings per share and free cash flow per share by over 70%. Following the buyback, approximately 16 million securities remain outstanding. The company will also pay Oaktree a $4.5 million consent fee, enhancing shareholder value by eliminating ownership overhang.

Positive

• Repurchase of 12.6 million shares at $6.40 per security increases shareholder value.
• Transaction expected to be accretive to EPS and free cash flow by over 70%.
• Eliminates ownership overhang from Oaktree Capital.

Negative

• Consent fee of $4.5 million adds to company expenses.

PURCHASE, N.Y., March 10, 2021 /PRNewswire/ -- Townsquare Media, Inc. (NYSE: TSQ) (the "Company" or "Townsquare") announced today that it repurchased the entirety of Oaktree Capital Management L.P.'s ("Oaktree's") 12.6 million shares and warrants of the Company at $6.40 per security, and subsequently retired those securities. On January 25, 2021 the Company had stated it would repurchase a minimum of 10 million securities from Oaktree.  In total, the Company repurchased 100% of Oaktree's 12.6 million shares and warrants, comprising 1.6 million shares of Class A common stock, 2.2 million shares of Class B common stock, and 8.8 million warrants. The purchase price of $6.40 per security reflected a 39% discount to the closing price of the Class A common stock on Tuesday, March 9, 2021, and a 19% discount to the pre-announcement share price. Based on current share counts, the transaction is expected to be immediately accretive on a free cash flow per share and adjusted earnings per share basis in excess of 70%.  At 10 million securities, the repurchase would have been accretive by approximately 50%. The aggregate purchase price for the securities was $80.4 million and was funded with cash on hand. In addition, the Company will pay Oaktree a $4.5 million consent fee related to the transaction in four installments, the first of which is due on April 1, 2021.  Following the repurchase, the Company has approximately 16 million securities outstanding, inclusive of common stock and warrants.

"We could not be more pleased to share that given our strong cash position, we were able to repurchase 100% of Oaktree's ownership interests in Townsquare, capturing a strong return for our shareholders. This is a beneficial transaction for our investors and the Company. The Oaktree share repurchase is significantly accretive on an earnings per share and free cash flow per share basis in 2021, and entirely eliminates Oaktree's ownership overhang for current and potential shareholders," said Bill Wilson, Townsquare's Chief Executive Officer. "We thank Oaktree for their long-term support of our Company. We look forward to discussing our fourth quarter and year-end 2020 results as well as our first quarter 2021 outlook on our earnings call next week."

Houlihan Lokey Capital, Inc. served as financial advisor to the Special Committee in connection with the repurchase.

Fourth Quarter and Full Year 2020 Results

Townsquare will release fourth quarter and full year 2020 financial results before the market opens on Tuesday, March 16, 2021. The Company will host a conference call to discuss certain fourth quarter and full year 2020 financial results on Tuesday, March 16, 2021, at 8:00 a.m. Eastern Time.

The conference call dial-in number is 1-877-407-0784 (U.S. & Canada) or 1-201-689-8560 (International) and the confirmation code is 13715882. A live webcast of the conference call as well as the press release disclosing the Company's results will be available on the equity investor relations page of the Company's website at www.townsquaremedia.com.

A telephone replay of the conference call will be available through March 23, 2021. To access the replay, please dial 1-844-512-2921 (U.S. & Canada) or 1-412-317-6671 (International) and enter confirmation code 13715882. A web-based archive of the conference call will also be available on the equity investor relations page of the Company's website.

About Townsquare Media, Inc.

Townsquare is a community-focused digital media, digital marketing solutions and radio company focused outside the Top 50 markets in the U.S. Our assets include Townsquare Interactive, a digital marketing services subscription business providing web sites, search engine optimization, social platforms and online reputation management for approximately 22,750 SMBs; Townsquare IGNITE, a proprietary digital programmatic advertising technology with an in-house demand and data management platform; and Townsquare Media, our portfolio of 322 local terrestrial radio stations in 67 cities with corresponding local news and entertainment websites and apps including legendary brands such as WYRK.com, WJON.com, and NJ101.5.com along with a network of national music brands including XXLmag.com, TasteofCountry.com, UltimateClassicRock.com and Loudwire.com. For more information, please visit www.townsquaremedia.com, www.townsquareinteractive.com, and www.townsquareignite.com.

Investor Relations

Claire Yenicay
(203) 900-5555
investors@townsquaremedia.com

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SOURCE Townsquare Media, Inc.

FAQ

What was the purpose of Townsquare Media's repurchase of shares from Oaktree Capital?

The repurchase aimed to increase shareholder value by eliminating Oaktree's ownership overhang and enhancing earnings per share.

How much did Townsquare Media pay for the Oaktree shares?

Townsquare Media repurchased 12.6 million shares and warrants for a total of $80.4 million at $6.40 per security.

What impact will the share repurchase have on Townsquare Media's earnings?

The share repurchase is expected to be accretive to earnings per share and free cash flow per share by over 70%.

When will Townsquare Media release its fourth quarter financial results?

Townsquare Media will release its fourth quarter and full year 2020 financial results on March 16, 2021.

What are the financial implications of the consent fee paid to Oaktree Capital?

The consent fee of $4.5 million will be paid in four installments, contributing to the company's overall expenses.