oOh! Media successful with $570m bid for Adshel

Bidding war for out-of-home player, Adshel, concludes after oOh! offers $570m purchase price

Ooh! Media has struck an agreement with rival out-of-home advertising player, Adshel, to acquire the business for $570 million, ending a bidding war for the latter business.

ASX-listed oOh!Media confirmed it had entered a binding agreement to acquire 100 per cent of share capital in Adshel from its parent, HT&E, for $570 million, with completion expected this year subject to ACCC approval. The purchase will be funded by a combination of $450 million in new debt and equity capital raising.

The successful bid from oOh! Media ends months of fierce bidding for the Adshel business between oOh!Media and its rival, APN Outdoor Group, itself the subject of a $1.09 billion acquisition bid by third player, JCDecaux.

OOh! kicked things off back in April with a $470 million bid for Adshel, which was promptly rejected by HT&E. On 22 May, APN Outdoor launched its $500 play for Adshel, saying the deal represented an important strategic expansion of its business.

Last week, APN upped its bid for Adshel to $540 million, just a day after JCDecaux lodged an unsolicited $1.09 billion bid for APN itself.

In a statement, oOh! CEO, Brendon Cook, said Adshel is highly complementary to its existing portfolio, opening up street furniture and rail specifically in Sydney and Melbourne as new segments while upping reach in different audience locations. He also signalled further opportunity to digitise Adshel’s assets, noting only 4 per cent of the company’s street furniture estate has been digitised to date. In contrast, about 40 per cent of oOh!’s assets have been digitised, representing 60 per cent of revenue during the 2017 financial year.

Cost synergies from the acquisition, specifically from combined infrastructure and resourcing, are expected to be between $15 million and $18 million and to be fully realised by 2020. For example, oOh! expects about $3 million in back offices and facilities synergies as part of the deal.

“The digitisation opportunity in the Adshel business is expected to provide a significant avenue for further growth beyond what has been achieved to date,” he said. “We are confident that oOh! shareholders will enjoy the benefit of cost synergies arising from the acquisition.”

Adshel provides poster and digital advertising on street furniture across Australia and New Zealand. Its inventory includes more than 21,000 poster faces and 887 digital screens, which it claims reach 92 per cent of Australia’s population as well as 87 per cent of New Zealand’s population.

Adshel reported revenue of $221.3 million in the 2017 financial year, with EBIDTA of $51.5 million.

Ooh! also confirmed it expected full-year EBIDTA guidance for 2018 to be between $94 million and $99 million, a 4.3 per cent to 9.9 per cent increased year-on-year and remaining consistent with guidance figures released in February.

The news saw APN call its own ASX trading halt, pending the release of an announcement by 27 June relating to the JCDecaux offer.

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+:google.com/+CmoAu 

 

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments

Blog Posts

5 things marketers need to do to get better in buy in when presenting

Presentations are a marketer’s best friend. They can be a concise, targeted and effective form of communication with the potential to make a real impact on your audience.

Emma Bannister

Founder and CEO, Presentation Studio

How to overcome negative habitual thinking

One of the greatest challenges facing senior leaders today is what’s going on in their own head.

Lisa Stephenson

Author, success coach, consultant

The purpose of purpose

Everyone knows the 4 P’s of marketing: Price, product, promotion and place. There is now a fifth ‘P’ in the marketing mix.

clearly someone who's jealous and only comments from the safety of being behind their keyboard

Peter Sibson

The purpose of purpose - Brand science - CMO Australia

Read more

haters gonna hate

David Bentley

The purpose of purpose - Brand science - CMO Australia

Read more

Social Media is platform where people get connected to each other from the world and share their views and thoughts on any product. Socia...

Tejas Potfode

6 Ways to ramp up Social Media to Your Web Design

Read more

We can't overlook mobile. Each passing day people are on their phones more and more

This Is My South Bay

What the 5G revolution will do to mobile marketing

Read more

An article largely re-purposed from things other people have said 5+ years ago – what's more, they said it better.

hogwash

The purpose of purpose - Brand science - CMO Australia

Read more

Latest Podcast

More podcasts

Sign in