Quadrant wins board approval for buyout of Australia's QMS Media

The QMS board has endorsed the private equity firm’s offer of A$1.22 per share, which represents a 36.3% premium to the October 23 closing price. Shareholders will also be entitled to a final dividend payment. The offer implies an enterprise value-to-2019 EBITDA multiple of 9.4x. The was suspended from trading on October 25 after it began to climb. Resuming on October 29, it gained 22% to close at A$1.22.

Quadrant is working in partnership with Barclay Nettlefold, the group CEO, and John O’Neill, who leads the Australia business. They have agreed to roll over their combined equity position – currently around 14.8% – into the acquisition vehicle. The offer is still subject to shareholder approval.

“We are delighted to have an opportunity to partner with Barclay and his experienced team. QMS has a proven track record of delivering sustainable growth. Under Barclay’s continued leadership and with Quadrant providing additional capital, we believe the business will continue to grow and deliver innovative market-leading solutions to customers across the Australia and New Zealand media and global sports divisions,” Jonathan Pearce, a partner at the PE firm, said in a statement.

Quadrant is currently deploying its ninth fund, which closed at A$1.15 billion in late 2017. The private equity firm has previous experience in the outdoor advertising space, having acquired APN Outdoor from APN News & Media in 2012. It listed the business two years later. Another of the top five players in the space, oOh! Media was owned by CHAMP Private Equity and ultimately exited via an IPO in 2014.

QMS was established in 2014 to aggregate various outdoor advertising assets – digital billboards, static billboards, street furniture, and retail and transit sites – across Australia, New Zealand, and Indonesia. Since listing in 2015, the company has completed a string of bolt-on acquisitions, ranging from New Zealand-based digital media business MediaWorks to several sports marketing companies.

QMS is now divided into three segments: outdoor advertising in Australia, sports marketing globally, and multimedia in New Zealand. It owns more than 150 digital billboards in Australia and New Zealand as well as a portfolio of on-field media and infrastructure contracts covering approximately 3,000 sporting events. The merger with MediaWorks brings radio and television assets as well.

The company generated A$204.2 million in revenue for the 12 months ended June 2018, up from A$168.6 million the previous year. Over the same period, net profit rise from A$16.7 million to A$18.4 million. However, these figures do not reflect subsequent M&A activity. For the six months ended June 2019, revenue increased 23% year-on-year to A$128.9 million and net profit was up 65% at A$16.5 million.

The Australia outdoor advertising business contributed A$64.4 million in revenue during the period, while the New Zealand operation – excluding MediaWorks – accounted for A$28.1 million. The remaining A$39.7 million came from sports marketing.

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• Topics
• Australasia
• Buyouts
• Media
• Australia
• New Zealand
• Quadrant Private Equity