oOh!media buys Adshel

Outdoor giant oOh!media has entered an agreement to purchase Adshel for $570m, with the deal expected to be completed by the end of the year, subject to ACCC approval.


It beat rival APN Outdoor in acquiring the company, with APN offering $230m in cash, along with a 51.4m share in APN. HT&E, the parent company of Adshel valued the offer at $540m-$580m based on fluctuations in APN’s share price. Both APN and oOh! shares have been placed in a trading halt following the oOh! announcement of its successful purchase.


APN made its offer for Adshel on Friday, one day after French-based signage company JCDecaux attempted to buy APN, under the condition the company did not purchase Adshel.


The acquisition would open up new segments of the market to oOh!, including street furniture, and rail signage, with the company citing cost synergies of $15m-$18m, with Adshel expected to achieve EBITDA of $48m-$50m in FY2018.


Adshel’s portfolio includes some 21,000 classic locations, with 800 screens across Australia and New Zealand.


Brendon Cook, CEO, oOh!media says, “oOh!media has a history of developing a diverse product portfolio to offer advertisers a range of audiences. Adshel is complementary to our existing portfolio and we are excited to be entering the new segments of street furniture and rail. The digitisation opportunity in the Adshel business is expected to to provide a significant avenue for further growth beyond what has been achieved to date. We are confident that oOh! Shareholders will enjoy the benefit of cost synergies arising from the acquisition.


While the ACCC has knocked back a potential merger between oOh And its biggest competitor, APN Outdoor, in May 2017, it cited a lack of competition in the marketplace in its reasoning. At the time, Rod Sims, chairman, ACCC, noted, “The ACCC is concerned the merger may damage the interests of site owners, who rely on competition between APN Outdoor and oOh!media to obtain the maximum rent for their sites.”


With APN still going strong, it stands to reason the ACCC will not have the same issues with the oOh acquisition of Adshel.


Under the terms made, oOh! must cease using the Adshel brand within three months of the completion of the acquisition.


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