Sirius XM Radio Ready To Get Down To Business
With the FCC formally announcing its approval of the merger of XM and Sirius, the satcasters announced today that the merger is a done deal. The combined company’s new official corporate name is Sirius XM Radio Inc., using the NASDAQ stock symbol SIRI.
The new company now has 18.5 million total subscribers, claiming it is the “second-largest radio company, based upon revenue, in the country.” As part of the merger, XM shareholders will receive 4.6 shares of Sirius common stock for each share of XM.
“I am delighted to announce the completion of this exciting merger between SIRIUS and XM,” said Mel Karmazin, CEO of SIRIUS XM Radio. “We have worked diligently to close this transaction and we look forward to integrating our best-in-class management teams and operations so we can begin delivering on our promise of more choices and lower prices for subscribers.”
“Every one of our constituencies is a winner. Combined, Sirius XM Radio will deliver superior value to our shareholders. By offering more compelling packages and the best content in audio entertainment, we are well positioned for increased subscriber growth. Our laser focus on subscribers will continue and listeners can be assured that there will be no disruption in service. We also believe that the completion of the merger will eliminate any confusion that has been lingering in the marketplace,” added Karmazin.
The much-tauted a la carte options have been announced as well. Some of the new options include “Best of Both” (accessing programming picked from XM and Sirius), discounted Family Friendly plans, and such tailored plans as “Mostly Music” and “News, Talk and Sports.” The new a la carte options will begin rolling out in the fall.
“One of the most exciting benefits of this transaction is the ability to offer subscribers the option of expanding their subscriptions to include the Best of Both services. Given the respective popularity of exclusive programming on both Sirius and XM, we expect many subscribers will upgrade their current subscription,” said Karmazin. “The upside potential for both consumers and shareholders is huge. Consumers have the ease of adding premier programming without purchasing a new device. For shareholders, this kind of organic growth is a key part of the company’s future and the success we expect to see.”
Karmazin added, “In addition to realizing significant potential revenue growth, the management team will move quickly to capitalize on the synergies that many analysts have predicted for this combination. We expect to begin achieving those synergies without sacrificing any of the world-class programming and marketing we are known for.”
The company also reiterated guidance for the combined Sirius XM Radio. Based upon a preliminary analysis, the combined company expects to realize total synergies, net of the costs to achieve such synergies, of approximately $400 million in 2009; to post adjusted EBITDA exceeding $300 million in 2009; and to achieve positive free cash flow, before satellite capital expenditures, for the full year 2009. The company also expects that both synergies and adjusted EBITDA will continue growing beyond 2009.
“We have all the tools necessary to begin executing as a combined company with high aspirations for subscriber growth and greater financial performance in part from the significant synergies that we begin realizing literally today — on Day One. We are moving quickly to integrate the operations,” said Karmazin.
Sirius XM’s corporate headquarters will be located in New York City, while XM will remain in Washington, DC as a ” wholly-owned subsidiary.”