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 cornerstones of a strong digital culture

Creating a strong company culture may sound like a daunting task, but it’s actually pretty straightforward. In fact, company culture is created in exactly the same fashion as a religion or democracy. Behaviours created from the organisation’s inception are reinforced over time by leadership, attracting like-minded people and eventually reaching critical mass to become an accepted ‘truth’.

Anthony Stevens

Founder and CEO, Digital Asset Ventures

Should you rebuild your company’s tech stack in blockchain?

The question I get asked most regularly these days is: ‘Do I need to rebuild my company’s systems on Blockchain?’ And the answer, every time, is ‘No, you’re asking the wrong question’.

Michelle O'Keeffe

CEO, Engaging.io

Customer value proposition: Getting the brand promise to your customers right

Throughout my career, I have witnessed a litany of brand names that profess to have a unique customer value proposition (CVP). In reality, however, they’ve had little more than a ‘value proposition’: A simple list of benefits applied to a general audience.

Ric Navarro

Global director of marketing and communications, Norman, Disney & Young

RE: Sales and marketing SLAs, often the choke point isn't the teams but them getting the data into the tools they want to use with the da...

Ed Fry

Why sales and marketing alignment is more important than ever

Read more

Amazing article Mitchell. I really enjoyed the read. Chatbots will be critical in the future evolution of banking and financial services ...

Giridhar Prathap Reddy

7 businesses successfully implementing chatbots

Read more

Thank you for the good and very helpful information. It is very interesting. I love all the things you share and see your beautiful creat...

รัตนาวดี ภูมิวรรณ

Former eHarmony marketing chief joins telco startup

Read more

Colin Kaepernick, not Mike Kapernick.

thisisw

Zenith's innovation leader: Mid-digital age not benefitting media, brands or consumers

Read more

AGA KHAN HOSPITAL is in need of kidney donors for the sum of 2 crore, Contact us today if you want to sell your kidney for money, and thi...

Sebastian Friedrich

Mindshare gets behind blockchain advertising alliance

Read more

Latest Podcast

More podcasts

Sign in