SiriusXM, North America’s main audio leisure firm, has entered a brand new section as an impartial public entity with a simplified capital construction.
On September 10, 2024, SiriusXM formally started buying and selling as an impartial firm on the Nasdaq World Choose Market below the ticker image SIRI. This milestone follows the completion of a posh transaction with Liberty Media Company that closed on September 9, 2024.
In keeping with Jennifer Witz, Chief Government Officer of SiriusXM, the corporate is poised to construct on its sturdy place in audio leisure. “We have created a robust and worthwhile enterprise, anchored by a subscription service that fosters deep and dependable connections with our listeners and a rising digital audio promoting platform which extends our attain to followers world wide,” Witz acknowledged.
The transaction with Liberty Media concerned a number of steps. First, Liberty Media accomplished a split-off of its wholly owned subsidiary, Liberty Sirius XM Holdings Inc. This was achieved by means of a redemption of Liberty Media’s Collection A, Collection B, and Collection C Liberty SiriusXM widespread inventory in change for shares of the brand new entity.
Following this split-off, a merger passed off between an entirely owned subsidiary of the brand new entity and Sirius XM Holdings Inc. (now renamed Sirius XM Inc.). On account of this merger, every share of widespread inventory of the outdated Sirius XM was transformed into one-tenth (0.1) of a share of the brand new firm’s widespread inventory.
The transaction has resulted in a major change in SiriusXM’s possession construction. Former holders of Liberty SiriusXM widespread inventory now personal roughly 81% of the brand new firm, whereas former Sirius XM minority stockholders personal the remaining 19%. The entire variety of excellent shares following the transaction is roughly 339.1 million.
SiriusXM additionally supplied an replace on its monetary outlook for 2024. The corporate reiterated its full-year income steerage of roughly $8.75 billion and adjusted EBITDA steerage of roughly $2.7 billion. Nevertheless, it revised its free money circulation steerage to roughly $1.0 billion, a $200 million discount from earlier estimates. This variation displays transaction-related prices and historic money outflows at Liberty Sirius XM Holdings Inc. previous to the closing.
Thomas Barry, Chief Monetary Officer of SiriusXM, emphasised the corporate’s deal with monetary efficiency. “As we enter our subsequent section as an impartial firm, we anticipate SiriusXM to proceed delivering stable, worthwhile outcomes,” Barry acknowledged. He outlined the corporate’s capital allocation priorities, which embody investing within the enterprise, lowering debt to return to long-term goal leverage, and persevering with capital returns to shareholders.
In keeping with these priorities, SiriusXM introduced plans to proceed its recurring dividend, which adjusted for the transaction can be roughly 27 cents per quarter. Moreover, the Board of Administrators licensed a $1.166 billion widespread inventory repurchase program, representing the remaining quantity from the previous SiriusXM’s $18 billion inventory repurchase program initiated in December 2012.
The corporate additionally reaffirmed its long-term goal leverage ratio of mid-to-low thrice adjusted EBITDA. SiriusXM plans to focus extra money flows on debt discount till it reaches this goal, whereas remaining open to strategic funding alternatives.
As a part of the transition, SiriusXM will carry out an analysis of its goodwill and different intangible property, significantly these attributed from the Liberty Media transaction. The corporate expects to finish this evaluation within the third quarter of 2024 and notes that any potential impairment cost can be non-cash and wouldn’t have an effect on liquidity, money flows from working actions, or debt covenants.
Key information
- Transaction closed on September 9, 2024
- SiriusXM started buying and selling as an impartial firm on September 10, 2024
- New ticker image: SIRI (Nasdaq World Choose Market)
- Roughly 339.1 million shares excellent post-transaction
- Former Liberty SiriusXM stockholders personal 81% of recent firm
- Former Sirius XM minority stockholders personal 19% of recent firm
- 2024 monetary steerage: $8.75 billion income, $2.7 billion adjusted EBITDA, $1.0 billion free money circulation
- $1.166 billion inventory repurchase program licensed
- Quarterly dividend of roughly 27 cents deliberate