APN Outdoor and oOh!media are merging in an all-paper deal which will create a billboard advertising group with a market capitalisation of $1.6 billion.
The deal approved by both boards creates a company with 8,985 digital and 63,200 classic screens, including billboards on roadsides, rail, airports, retail, offices and other bespoke venues.
“The merger of APN Outdoor and oOh!media is a compelling opportunity for all shareholders,” says Doug Flynn, chairman of APN Outdoor.
“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. We are excited by the growth prospects presented by this merger.”
Michael Anderson, chairman of oOh!media says the combination will create an attractive media offering, supported by a passionate and experienced team.
oOh!media shareholders will get 0.83 APN Outdoor shares for each oOh!media share held. APN Outdoor shareholders will end up owning 55% of the new group. APN Outdoor shares last traded at $5.40.
The combined group would have had an EBITDA (earnings before interest, tax, depreciation and amortisation) of $171 million in 2016.
The merger is expected to deliver pre-tax cost synergies of at least $20 million a year. One off costs are $10 million.
Richard Herring, CEO of APN Outdoor, will step down after 16 years in the role.
Cadence Advisory and UBS are acting as financial advisers to APN Outdoor. Gilbert + Tobin is legal adviser.
Highbury Partnership and Macquarie Capital are acting as financial advisers to oOh!media, while Herbert Smith Freehills is legal adviser.
In October APN Outdoor announced it was taking full ownership of Adshel, with its network of digital street advertising screens, for $268.4 million.
Adshel has the number one position in street furniture advertising space in Australia and New Zealand with 22,000 static and digital panels.