Two of Australia’s leading outdoor media giants, APN Outdoor and oOh!media have revealed plans to merge in a bid to create a $1.6bn ‘leading, diversified media group’.
The directors of APN Outdoor and oOh!media have unanimously agreed for the transaction to be completed via an oOh!media scheme of arrangement set to be implemented in April.
The companies say the deal will give the merged entity a lion’s share of advertising clients in the outdoor space as well as expanded audience and diversity.
The combination of both companies’ portfolios will also see the merged group in possession of 8,985 digital and 63,200 classic screens and panels across metropolitan and regional locations.
The deal is expected to deliver FY16 pro forma EBITDA of $171m and cost synergies of at least $20m per annum.
With APN Outdoor and oOh!media currently the top two biggest outdoor companies in Australia and New Zealand, the merged group will dominate the market with a pro forma market capitalisation of $1.6bn.
The merged group’s board will comprise of eight directors, four each from APN Outdoor and oOh!media’s current boards.
Current oOh!media CEO Brendon Cook will be appointed as the merged group’s CEO and managing director, Doug Flynn will be appointed as the chairman, and Wayne Castle as the chief financial officer.
Flynn comments, “The businesses bring together complementary asset portfolios across key formats in metropolitan and regional markets to create a leading and diversified out-of-home and digital online media group in Australia and New Zealand.”
Chairman of oOh!media Michael Anderson says the combination of both businesses will create an attractive media offering with an experienced merged team.
“We believe the amount of cost synergies expected to be generated, and the resulting EPS accretion will create substantial value for both shareholder groups,” he says.
“We are pleased that the enhanced balance sheet strength and financial scale, together with increased funding opportunities, will support the merged group’s ability to pursue further growth and digitisation opportunities.”
On completion of the transaction, existing shareholders of APN Outdoor and oOh!media will own 55 per cent and 45 per cent respectively of the merged company.
Shareholders of oOh!media will cast their vote on the scheme of arrangement at a meeting to be held in March.
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