Media giant APN has reached a binding agreement to acquire 100 per cent of street furniture outfit Adshel for $268m, in a move that will give the group some 22,000 more static and digital outdoor signs.
Adshel was formed in 1997 in a joint venture between APN and advertising group Clear Channel, and has been half owned by APN since its inception. To finance the deal, APN says it will engage in an equity raising of $273m.
Adshel’s collection of transport screens in Sydney’s rail network – which makes part of its digital roll-out Adshel Rail – will also be procured by APN.
APN chief executive Ciaran Davis says the acquisition is consistent with the group’s plans to purchase outdoor assets in high-growth areas, pushing its gradual transition into a digital company.
“The acquisition of the remaining 50 per cent of Adshel continues APN’s significant transformation, placing APN in a stronger position in the Australian media industry to deliver an integrated radio, outdoor, mobile and video offering,” says Davis.
“It will allow the Adshel management team to drive the strategic direction of the business and pursue opportunities that facilitate growth, including a continued focus on innovation and the progressive digitisation of the portfolio.”
The group also says the acquisition presents opportunities to push Adshel’s digital reach, stating it is ‘under-penetrated in digital compared to competitors’, with a goal of expanding its existing 516 digital faces to 1500 within the next three years.
In the 12 months leading up to June 30 2016, Adshel posted $170m in revenue and an EBITDA of some $42m.
In addition to acquiring Adshel, APN also entered into an agreement to purchase digital and mobile media business Conversant Media.
APN’s aggressive outdoor and digital growth makes part of the media giant’s exit from traditional media. The group has almost completed the sale of its print business Australian Regional Media (ARM) to News Corp for $36m.
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