APN sells half of outdoor division to private equity

APN has sold 50% of its out of home operation APN Outdoor to Quadrant Private Equity in a deal which sees the unit valued at $292m and APN bank $190m.

The move was announced hours after outdoor veteran Pierce Cody revealed that he had resigned from the APN board over what he described as concerns over corporate governance. The company has not yet accepted Mumbrella’s invitations to comment on this.

The APN deal comes as the company this morning revealed a poor set of numbers to the ASX.

Although revenue for the company increased slightly to $1.072bn, the company’s EBITDA profits were down 14% to $209m. The company declared a net loss of $45m dribven by resctructuring and other costs.

Outdoor was the brightest spot for APN, with revenue growing by 10% and reporting an increase in profits of a third.

Profits for APN’s regional media were down by 27%, while its NZ media was down 25%. Its radio interests were flat.

The sale of APN Outdoor is the second such deal with private equity firm CHAMP buying into oOh Media late last year.

The deal comes at a crucial moment for the outdoor industry.

December saw APN successfully outbid Moove Media  to maintain its hold on the Brisbane Council bus fleet contract. The Sydney contract also held by APN – worth $80m to $100m over the next five to seven years – is currently being tendered with bidders likely to include APN Outdoor and Moove. The Adelaide tender is also imminent.

A further new dynamic in the market is the arrival of Aegis’ specialist outdoor buying agency Posterscope which has the potential to upset buying arrangements if it establishes a foothold.

APN Outdoor’s existing staff and management including CEO Richard Herring will remain in place following the sale. According to APN, the deal will see the company invest in “digital rollout and expansion”.


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