Description

Clason interactive is a Latin American Media Company that trades at 7 times EBITDA. The Company generates 19 mln in EBITDA has 78 mln in net debt and a 56 mln market cap.


Please read my previous writeup on VIC.


I now point you to several articles in latin american publications which state that XSON has received and offer for its Chilevision asset valued at 30 mln dollars from Valores Bavaria owned by the Santo Domingo family; the richest family in Colombia and one of the richest in Latin America.

http://news.google.com.co/news?q=Chilevisi%C3%B3n%20pinera&hl=es&lr=&ie=UTF-8&sa=N&tab=wn

You are going to need the help of a spanish reader for this.


Unfortunately I don't know how much EBITDA Chilevision generates but I would fall off my chair w/ surprise if it generated more than 10% of XSON's EBITDA or approximately 1.9 mln.

There are several interesting parts to the transaction with the first one being that it has not been published about in North American papers, bloomberg or reuters.

The second one is that you have a strategic buyer paying 16 times for an asset of a company which trades at 7 times which means one of two things; i) The entire company is undervalued
ii) The buyer is overpaying but as an XSON shareholder you don't really care b/c you get the money and the difference in multiples multiplied by the EBITDA acretes to your equity. In this case the difference is 9 points times 1.9 mln in EBITDA or 17 mln. As a percentage of market cap 17 mln represents 31% or in other words 31% upside for XSON for a transaction that has been announced just not in US papers.

Further upside is possible given that Chilevision's EBITDA is probably 5% of XSON's EBITDA not 10% which I have assumed.

Catalyst

Announced Asset Sale