Quadrant, APN announce outdoor advertising JV
Quadrant Private Equity has agreed to form an outdoor advertising joint venture with APN News & Media worth A$272 million ($289 million). APN had decided further investment was required to support expansion and entered into exclusive negotiations with the private equity firm last week.
The joint venture will operate under the name APN Outdoor and include APN's outdoor advertising businesses in Australia and New Zealand, as well as a 50% stake in Indonesia-based Rainbow Premium Outdoor. It will be led by the current APN Outdoor management team.
Adhel, APN's joint venture with Clear Channel, and its Hong Kong-based assets, Buspak and Cody, will remain outside the joint venture.
APN, which also owns a string of newspapers, radio stations and websites in Australia and New Zealand, as well as a commercial printing business, expects to generate cash proceeds of A$190 million from the transaction. A portion of these will be re-invested in expanding the joint venture's reach. Brett Chenoweth, CEO of APN, said that the two firms had already identified a number of opportunities that fit with APN Outdoor's growth objectives.
Chris Hadley, managing director of Quadrant, said in a statement: "Outdoor advertising is one of the fastest-growing media sectors, being a beneficiary of changes in the media landscape. We believe a well-capitalized business will be able to further drive innovation and capitalize on growth opportunities to thrive in the evolving media landscape."
The Quandrant-APN partnership is tipped to trigger wider consolidation in Australia's A$494 million outdoor advertising industry. In December 2011, CHAMP Private Equity agreed to purchase specialist outdoor media company oOh!media for A$163 million.
APN is also said to be involved in exploratory discussions with Fairfax Media regarding its publishing assets. Joint ventures are seen as a way of freeing up capital to pay down debt and invest in higher-growth areas. Outdoor advertising is APN's principal revenue generator while the print publishing business is struggling due to falling advertising sales.
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