Ooh Media to acquire Executive Channel Network and raise $60m to fund deal
Outdoor media company Ooh Media has announced its intention to spend $68.5m to acquire rival outdoor company Executive Channel Network.
The company put its shares in a trading halt this morning pending the announcement, which also includes plans to get $60m from shareholders in a capital raising to fund the investment.
ECN was founded 10 years ago and has digital screens on lifts and car parks in office blocks in 280 sites across the country, primarily targeting business people. In its forecast Ooh said it would add $8m in EBITDA to the company next year, and realise $3.2m in cost synergies as well. The purchase is being made by Ooh subsidiary Inlink, which is a rival of ECN.
Ooh CEO Brendon Cook said in a statement: “The acquisition will consolidate Ooh’s market leading position in the highly valuable CBD office segment. It is in line with Ooh’s strategy to drive engagement with audiences through a diversified portfolio of digital and classic screens in unmissable locations and will further enhance our digital market leadership.”
While the majority shareholders in ECN have agreed to the purchase there are still a long tail of shareholders yet to sign on, which could delay the transaction going through.
The revenue raising will offer 12.6m ordinary shares at $4.75 each and is expected to settle before October 14.
Yesterday shares in the company (ASX: OML) opened at $4.90, significantly down on their closing price from Friday of $5.04. They finished Monday on $4.89, giving the company a market capitalisation of $734m.
Ooh Media’s share price on Friday and Monday (Source: Google Finance)
Ooh made headlines in July when it acquired the majority of millennial-focussed publisher Junkee Media, with plans to boost its content offerings on its outdoor assets.
In its half year results released in August the company said it had grown revenues by 18%, and remained on target for its profit target for the year at $68m-$72m.
More soon.
Well done ECN!
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