Ooh, which is owned by Blue Star backer Champ Private Equity, had agreed in July to buy Eye for $145 million, but pulled out of the deal last month. The new deal values the combined company at $232 million, after Ooh reported revenue of $119 million in its most recent results.
Chief executive Brendon Cook told ProPrint that he expected print volumes would rise, despite this consolidation among outdoor firms.
“In the short term, I don’t expect there will be any change to print volumes. In the long term, clearly as a sector our goal is to lift it from around the 4% [of advertising spend] to the 6%.”
Cook said advertising campaigns would change more rapidly in the future, which would mean more work for printers.
He also said the rise of online advertising would be beneficial, because it would draw new companies into the advertising market.
[Feature: Will digital kill off screen soon?]
However, he said it would be difficult for new printers to capitalise on the growth in outdoor given the technical challenges of the work and the demands for very fast turnaround times.
The combined company will will trade under the Ooh name, be led by Cook and will operate out of Ooh’s head office in North Sydney. He wouldn’t be drawn on the headcount, telling ProPrint that a process was underway to review staff roles.
Cook said Ooh hoped to hit turnover of $250 million at the end of the 2013 calendar year, which would mark a seven-fold increase on the $34 million of sales the company recorded in the 2005-06 financial year.
Champ Private Equity director Darren Smorgon said: “Ooh’s acquisition of Eye is consistent with Champ’s aim of building great companies both organically and also through acquisition.
“This acquisition follows three Champ deals in the last three months, with a combined enterprise value of over $2 billion.”
[LinkedIn: Will we see more consolidation in the industry?]
Comment below to have your say on this story.
If you have a news story or tip-off, get in touch at editorial@sprinter.com.au.
Sign up to the Sprinter newsletter