Acquisition Strengthens CBS Outdoor’s REIT Portfolio Adding 1100 Large Format Billboards
NEW YORK, NY — CBS Outdoor (CBSO) has announced that it will acquire Van Wagner’s outdoor advertising businesses for $690 million in cash. CBSO will acquire approximately 1,100 large-format billboard displays in 11 top U.S. markets. Total 2013 revenues of the acquired assets are $206 million.
According to CBS Outdoor, the acquisition will strengthen its REIT asset portfolio with more than 90% of the acquired revenues being derived from REIT eligible assets. In addition, over 95% of acquired revenues will be derived from Top 10 DMAs. CBS intends on financing the transaction with cash on hand and proceeds from the issuance of additional long-term debt resulting in gross leverage of 4.9x. The Company intends to hire personnel from Van Wagner team to sell, service, and grow the Company’s enhanced
There has been a lot of consolidation in the out-of-home advertising space recently. Last March, JCDecaux announced the acquisition of CEMUSA for 80 million euros ($112,591,000). And last month, Astral Out-of-Home, a division of Bell Media, announced that it will acquire Macdonald Outdoor’s digital out-of-home (DOOH) advertising network in Edmonton. Astral’s acquisition includes nine large-format digital faces located at Edmonton’s most strategic intersections. Astral Out-of-Home also announced plans to erect 12 new large-format digital billboards in Edmonton and Calgary.
CBS Outdoor was not the only company in acquiring Van Wagner’s assets. “Although we’re disappointed that we didn’t win the bidding for Van Wagner, the 21.6x multiple reported in CBS’ presentation this morning is the highest-multiple deal in the out-of-home industry in the last ten years and a great validation of the value of Outdoor,” said David Grabert, SVP, Marketing & Communications, Clear Channel Outdoor.
“We’re very pleased to be announcing an exciting transaction regarding this high quality group of outdoor assets,” said Jeremy Male, Chief Executive Officer. “It’s a unique opportunity that aligns perfectly with our top-market growth strategy and will enhance the scale, quality, and depth of our portfolio which we believe will be great for our advertising partners. Further, we expect the Van Wagner assets to contribute significantly to our REIT operations, driving increased shareholder value.”
Richard Schaps, Chief Executive Officer of Van Wagner, said, “After having spent more than 40 years building Van Wagner’s outdoor advertising business into a leading industry participant, I am delighted to be turning this division over to CBS Outdoor, a great organization with outstanding new leadership who can grow this business into the future. Van Wagner will now focus on building our Sports and Entertainment group as well as our leading Blimp and Aerial division.”
Centerview Partners, Goldman, Sachs & Co., and Peter J. Solomon Company are acting as financial advisors and Jones Day is acting as legal advisor to CBS Outdoor. Wells Fargo has provided committed financing in support of the acquisition. Evercore Partners and Onera Media are acting as financial advisors and Fried Frank Harris Shriver & Jacobson is acting as legal advisor to Van Wagner
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