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

4 creative skills that will be useful forever

In recent times, the clarion call from futurists, economists, marketers, educators and leaders the world over is one of slight panic, “The world is changing and you’re not ready for it!” And of course, they make a very good point.

Kieran Flanagan and Dan Gregory

Speakers, trainers, co-authors

Why defining brand strategy is vital to capitalising on quick wins

Big brands were once protected from small brands by high barriers to entry. Big brands had the resources to employ big agencies, to crack big ideas and to invest in big campaigns. They had the luxury of time to debate strategies and work on long-term innovation pipelines. Retailers used to partner with big brands.

Troy McKinnna

Co-founder, Agents of Spring, Calm & Stormy

3 ways to leverage the talents of your team to avoid disruption

​According to the World Economic Forum in its most recent The Future of Jobs report, the most important skills for the future are not technical, task-oriented skills, but higher-order skills such as creativity, social influence, active learning, and analytical thinking.

Gihan Perera

Futurist, leadership consultant

I thought this was what Salesforce Audience Studio (formerly Salesforce DMP) was supposed to do. How are a CDP and a DMP different? I'm c...

Tony Ahn

Salesforce announces customer data platform

Read more

Well written Vanessa!! Agreed with your view that human experience is marketing's next frontier. Those businesses who are focused on the ...

Clyde Griffith

Forget customer experience, human experience is marketing's next frontier

Read more

Great tips for tops skills need to develop and stay competitive

Nick

The top skills needed to stay competitive in a rapidly changing workforce

Read more

The popularity of loyalty programs is diminishing, though I'd say it is because customers are savvy enough to recognise when a loyalty pr...

Heather

It’s time for marketers to rethink their approach to ‘loyalty’

Read more

Thanks Nadia for sharing this blog. It has really useful and amazing information about Salesforce Commerce Cloud and digital engagement w...

Holly Smith

Adidas taps data and technology smarts to build personalised digital engagement with consumers

Read more

Latest Podcast

More podcasts

Sign in