has agreed to acquire 100% of CTV, the Canadian leader in specialty television, digital media, conventional TV and radio broadcasting. The transaction gives Bell
full ownership of Canada's best media assets to enhance the growth of Bell's TV, wireless and online services for years to come.
Bell currently owns a 15% equity position in CTV and will acquire the remaining 85% for $1.3 billion in equity value from The Woodbridge Company Limited, the Toronto-based holding company of the Thomson family; Ontario Teachers Pension Plan; and Torstar Corporation. Including the value of Bell's present stake, the transaction has an equity value of $1.5 billion. Together with $1.7 billion in proportionate debt, the total transaction value is $3.2 billion. The purchase price represents a multiple of 10x proportionate EBITDA, comparable with similar recent media-industry transactions. In a separate transaction, Woodbridge will acquire ownership of the Globe and Mail, in which Bell will continue to retain a 15% equity position.
Video is growing rapidly in popularity among Canadians, who are increasingly moving to mobile, online and digital TV platforms for video content. Bell already offers Canada's leading High Definition TV and online services and the most advanced mobile TV products, and is in the process of launching its leading-edge Bell Fibe IPTV (internet protocol television) service in major urban centres. Bell TV now represents approximately 40% of total residential service revenues, surpassing traditional home phone revenues.
Bell is accelerating its wireline and wireless video capabilities with significant new investments in broadband networks, including capital expenditures of almost $3 billion in 2010 alone. Bell is rolling out high-speed fibre to more houses, apartments, condominiums and businesses in Québec and Ontario to support new Internet and TV services and is enhancing its new world-leading HSPA+ wireless network, which already serves 93% of the Canadian population.
CTV operates Canada's #1 television network with 27 stations across the country; 30 specialty channels, including TSN and RDS, the top English and French specialty channels; premium online video programming and properties such as CTV.ca, TSN.ca, RDS.ca, MuchMusic.com, MTV.ca and TheComedyNetwork.ca; and CHUM Radio, which operates 34 radio stations throughout Canada.
The CTV transaction is subject to customary approvals, including approvals from the Canadian Radio-television and Telecommunications Commission and the Competition Bureau. Closing of the transaction is expected by mid-2011.