After nearly a decade of private ownership, Univision — which modestly considers itself “the gateway to Hispanic America” — is preparing to rejoin the public stock markets.
The country’s biggest Spanish-language broadcaster has filed to go public, seeking new investors as its target audience continues to grow in size and power.
In its prospectus, Doral-based Univision noted that Hispanics now make up more than 17 percent of the total population of the U.S., having accounted for more than half of the country’s population growth over the last five years. The broadcaster also cited projections that Hispanics’ buying power will rise from $1.3 trillion last year to $1.7 trillion in 2019.
Essentially founded in 1992, when the businessman Jerry Perenchio led a group that bought the Univision Network from Hallmark Cards, the company grew to become a dominant force within Spanish-language media. Its empire now encompasses its namesake channel, as well as Galavisión; the sports network Univision Deportes, as well as an array of local radio and digital outlets.
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The planned stock sale also comes as Univision is embroiled in a fight with Doral neighbor Donald J. Trump after dropping its forthcoming broadcast of the Miss USA pageant over his denouncing Mexican immigrants as “rapists” and “murderers” in the kickoff for his presidential campaign. Trump has sued the media company for $500 million, accusing it of violating a five-year broadcasting contract.
Yet when Univision finally begins trading on the public stock markets, under the ticker symbol “UVN,” the company’s current owners are unlikely to celebrate too loudly. Those financial investors — a consortium that includes the billionaire Haim Saban and the private equity firms Madison Dearborn Partners, Providence Equity Partners, TPG and THL Partners — paid $13.7 billion for the network in 2007, at the height of the leveraged buyout boom.
Such was the interest in Univision that the Saban group battled fiercely with rival suitors, in the form of a partnership that included Grupo Televisa, Bain Capital and the investment firm for Bill Gates’ personal fortune.
But since then, the company has taken on the dubious distinction of being a private equity investment that has been tough to exit, alongside other megadeals like Clear Channel Communications. Last year, Univision’s owners held preliminary sales discussions with a host of potential suitors, including CBS, Viacom and Time Warner.
Another potential bidder has been Grupo Televisa, the Latin American media producer that supplies much of Univision’s content and already owns a roughly 5 percent stake. But federal broadcasting regulations prohibit a foreign company from owning more than 25 percent of a broadcaster, though exemptions can be made.
So important is the relationship with Televisa, however, that the two companies announced an extension of their business relationship on Thursday. That contract will now continue to 2030, and Televisa will own roughly 22 percent of Univision’s voting stock and the right to name an unspecified number of directors on the broadcaster’s board.
Now Univision’s owners are now betting that they can collect a bigger payout—- around $20 billion or so — by taking the network public in an IPO instead. It’s biggest rival, Hialeah-based Telemundo is owned by NBCUniversal.
The company has enjoyed moderate revenue growth over the past three years, according to the prospectus. It reported $2.9 billion in sales last year, up 11 percent from 2013. But its net income tumbled to $900,000 from $216 million in 2013, largely arising from a noncash accounting charge tied to a write-down of programming assets.
Using a nonstandard financial measure known as operating income before depreciation and amortization, which strips out stock-based compensation and other noncash charges, the network’s income rose 13 percent, to $1.2 billion.
Not many other details of the stock sale — like when it would be held, how many shares Univision planned to sell or which exchange would host its ticker symbol— - were disclosed in Thursday’s document. (The company listed a preliminary $100 million fundraising target to determine listing fees.)
Univision’s prospectus also shed light on some of the company’s other endeavors. Among the most prominent of late is the digital- and cable-TV network Fusion, an English-language joint venture with the Walt Disney Co. into which both media companies have poured millions of dollars and stocked with name-brand journalists.
Meant in large part to tap into the same digital-media vein that Vice and BuzzFeed have successfully mined, Fusion has started off slowly. The IPO document disclosed that Fusion’s losses widened last year to $35 million, even as its sales jumped ninefold, to $28.1 million.
The company also disclosed financials for El Rey, the English-language channel led by the filmmaker Robert Rodriguez. The venture reported a $64.4 million loss last year atop $45 million in revenue.