RE:RE:Why Consolidation Will HappenHi 99,
VertigoScope generated EBITDA of almost $35 million in 2019. My valuation represents a multiple of fewer than 7 times in a desirable space for a number of industry players. I don't think Torstar's share of VS at $125 million is outrageous. Sure they paid $178 million in 2015, but by Torstar standards, this is an absolute home run.
Metroland has a dominant market position in some of the best communities in Canada. Selling those properties as a whole or in parts would generate at least $75 million.
The Toronto Star and the other dailies are also in some of the best markets in Canada. I don't know precisely what someone would pay to own the Toronto Star, but it would attract lots of interest and someone would pay a lot regardless of its financial performance. I think $75 million is conservative.
Blue Ant and Black Press are run by individuals with impeccable qualifications and a track record of success. This valuation is also sound. I only wish either David Black or Michael MacMillan was leading Torstar.
Cash is cash. The garage sale of assets will eventually wind down, but between government largesse and continued cost-reduction initiatives, this number should be in the right ballpark.
These are fundamentally good businesses with challenges to be sure but they are transitioning without leaders that inspire any confidence - hence the share price. Analysts don't ask questions on the quarterly because they've checked out as they see nothing good happening as long as the Voting Trust maintains control. Listening to Boynton and DeMarchi prevaricate on the mythical transformation is just too painful for even the most seasoned analyst to endure.
This is not an easy investment decision. I don't trust Honderich or Boynton to make a single decision in the best interest of shareholders, It is only after they are shown the door will the true value of Torstar will be fully realized. You need to invest, forget and wait for an appropriate ROI to happen.
MW