Bce Inc. · TSX:BCE
Bce — Merger or Acquisition (September 2010)
19 slides from Bce's merger presentation, Sep 10, 2010
Slide 1: Acquisition of CTV
Acquisition of CTV Analyst Conference Call September 10, 2010
Slide 2: Safe harbour notice
Safe harbour notice Certain statements made in this presentation including, but not limited to, statements relating to the proposed acquisition by BCE Inc. of the remaining 85 per cent stake in CTVglobemedia Inc. that it does not already own, the expected closing date of the transaction, certain str
Slide 3: George Cope, President & Chief Executive Officer
George Cope President & Chief Executive Officer
Slide 4: Transaction overview
Transaction overview • Acquiring 100% of CTV – 15% equity stake in The Globe and Mail CTV maintained Television • $1.3B equity value for additional 85% stake – $1.7B in proportionate debt • 9.9x proportionate EBITDA multiple • Woodbridge/Thomson Group to take $750M in BCE common stock at closing • C
Slide 5: CTV is Canada's #1 media company
CTV is Canada’s #1 media company • Leading portfolio of 30 Specialty television channels Specialty Channels • Canada’s #1 Specialty channel, TSN as well as RDS, Discovery, y Comedy, y Much Music and MTV • Canada’s most watched network for the 9th straight year, with 8 out of the Top 10 programs (adu
Slide 6: Strategic context and rationale
Strategic context and rationale Communications landscape has changed dramatically in the last five years • Cable competitors increased media ownership and expanding into wireless • Sports and news genres deregulated in late 2008; Internet and mobile unregulated • Ad ti off mobile Adoption bil TV/ TV
Slide 7: Industry structure in 2006
Industry structure in 2006 Video content was a separate business Video was largely viewed on 1 screen 7
Slide 8: Industry structure today
Industry structure today Video content is part of an integrated business Launched IPTV and DTH Video content is now viewed on 3+ screens Launched Launching on Sept.9 Acquisition substantially strengthens our competitive position 8
Slide 9: Regulatory considerations
Regulatory considerations Video Platform Regulatory Cable and Internet Mobile Classification Satellite • Conventional • Must Carryy Specialty Regulated • Video-On- Not Not Demand Regulated Regulated • Pay-Per-View Deregulated D l t d • Sports / News in Oct. 2008 Today’s regulatory and technological
Slide 10: Multi-platform viewing is growing
Multi-platform viewing is growing Watched a 30-60 minute TV show on Near ubiquitous broadband a website b it in i pastt month th and increasing speeds Internet enabling dramatic increase in on-line viewing >30% of Canadians on-line Watched a video clip on a mobile phone in past month Deployment of n
Slide 11: Bell TV / Video is a key growth driver for Bell
Bell TV / Video is a key growth driver for Bell Bell TV / Video Continued product leadership supports profitable and growing Bell’s Video revenues Video as % of Bell’s Bell s Residential revenues video business ~40% • National DTH footprint with growing base of ~2M subscribers ~20% • Accelerated rol
Slide 12: Rising content costs
Rising content costs Video Content Costs Video content is the fastest growing cost for Bell • Programming now accounts for 40% ~10% of total Residential video costs CAGR ~$600M $600M • CTV is one of Bell’s largest suppliers of video programming ~$350M Bell also spends $200M+ on advertising annually
Slide 13: The future of Bell TV
The future of Bell TV Investments in broadband …delivering an integrated networks and services… viewing experience TV Bell TV Anytime, Anywhere 5 million + homes IPTV enabled National DTH network with leading HD 15+ position million screens in 2015 National wireless ireless +/ broadband network with
Slide 14: Transaction advances Bell's Strategic Imperatives
Transaction advances Bell’s 5 Strategic Imperatives Accelerate Wireless • Extending lead in mobile video/TV with premier sports, news and music properties Leverage Wireline • Access to product differentiation through content Momentum positions Bell TV as a leader in multi-platform viewing Achieve a
Slide 15: Siim Vanaselja, Chief Financial Officer
Siim Vanaselja Chief Financial Officer
Slide 16: Attractively valued transaction
Attractively valued transaction Current Ownership Structure Key Details • Full ownership of CTV Bell Woodbridge OTPP Torstar (15%) ((40%)) ((25%)) ((20%)) – Remaining 85% equity stake being acquired – Maintaining 15% equity stake in Globe and Mail • Total enterprise value of ~$3.2B for 100% of CTV •
Slide 17: Maintains strong balance sheet and credit profile
Maintains strong balance sheet and credit profile Estimated Financing Structure ($B) • Transaction financing fully committed Committed debt financing & surplus cash 2.0 – New committed credit facility of $2.0B BCE equity issuance 0.75 – BCE shares issued to Thomson family at closing g subject j to t
Slide 18: CTV financial profile
CTV financial profile CTV Financials (1) • Immediately EPS and FCF per share accretive, even before Revenues $1,870M synergies EBITDA $385M Margin 20.6% • 100% access to CTV cash flows Capital expenditures $75M Capital p Intensity y 4.0% • Improves p Bell’s growth g profile p Simple FCF $310M Margin
Slide 19: Summary
Summary • Acquiring 100% of Canada’s premier media asset at an attractive valuation • Communications landscape has changed dramatically in the last five years • Video/TV is important to the future of Bell Canada • Adoption of Mobile TV is set to accelerate • Commercial launch of IPTV underway • Acqu