oOh!media to acquire Adshel from HT&E and launch capital raising

• oOh!media gets Adshel – winning bid of $570m if ACCC doesn’t object

oOh!media Limited has entered into a binding agreement to acquire 100% of the share capital in Adshel from HT&E Limited for cash consideration of $570 million.

The acquisition value implies an EV/EBITDA multiple of 11.6x pre-synergies, or 8.7x post-synergies. The completion of the acquisition is expected to be in 2018 and is subject to ACCC approval. The purchase price will be funded with a combination of new debt and an equity capital raising.

oOh!media is undertaking a fully underwritten 1 for 2.3 pro rata accelerated non-renounceable entitlement offer to raise approximately $329.9 million (entitlement offer).

oOh!media has arranged fully underwritten new debt facilities in connection with the acquisition, with a total facility limit of $450 million (New Debt). The New Debt will be used to refinance existing oOh!media debt, partly fund the Acquisition purchase price, and to retain flexibility for future capital expenditure and general corporate purposes.

The acquisition is expected to be low double digit EPSA accretive on a pro forma CY2018F basis for oOh!media. This includes expected cost synergies but excludes one-off integration costs and transaction costs. Cost synergies from the acquisition of Adshel are estimated to be $15-$18 million and are expected to be 60% realised in 2019 and fully realised in 2020. These synergies are expected to predominantly comprise savings from leveraging combined infrastructure with duplicated resource rationalisation and reducing outsourcing costs.

oOh!media CEO Brendon Cook said: “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 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.”

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