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Wednesday, March 10, 2021

Townsquare Completes Buy Out Of Oaktree For $80.4M


Townsquare Media, Inc. announced today that it repurchased the entirety of Oaktree Capital Management L.P.’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.

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