BCE Inc.’s agreement to acquire Astral Media Inc. is reasonably priced and strategically sound, a UBS Securities research note said this week. The report, by UBS analyst Phillip Huang, said the $3.38 billion acquisition makes sense because it will help BCE improve the company’s growth profile, lower the risk against content cost inflation and support the company’s dividend growth model. The report said the largest portion of Bell’s annual content acquisition costs went to Astral and that the agreement will help protect Bell against the negative impacts of cost inflation. “In addition, Astral would help Bell narrow the gap on French content against its main competitor in Quebec—Quebecor Media ,” the research note said. UBS said Bell is paying a “reasonable price” for Astral based on the company's profits. The report said Bell would pay 10.4 times as much as Astral’s net earnings over four quarters, which is similar to what BCE, Shaw Communications Inc. and Rogers Communications Inc. paid for broadcasters CTV, CanWest, and Citytv, respectively. Bell finalized its purchase of CTV last year for $3.2 billion. UBS said the Astral deal would lead to several personnel redundancies. “We believe there is significant function overlap between Bell Media and Astral’s head offices, and expect substantial synergies,” the report said.