Quadrant-backed APN Outdoor to raise $289m in IPO
Quadrant Private Equity will make a partial exit from ANP Outdoor as the Australian advertising business raises A$329.3 million ($289 million) through an IPO.
APN has priced its offering at A$2.55 per share, the bottom end of the indicative range. The company will sell 129.1 million shares, of which 82.7 million will be offloaded by Quadrant. The private equity firm will realize proceeds of around A$210 million and see its holding in APN fall from 93.7% to 20%. Based on the IPO price, the remaining interest will be worth $85 million.
Company management currently owns a 6.3% stake. This will fall to 2.5% post-offering, following the sale of 3.6 million shares.
The enterprise value of APN on listing - its market capitalization at the offer price plus pro forma net debt - will be A$503.6 million. This translates into a valuation of 9.4x forecast EBITDA for the 2015 financial year.
APN was formed in 2004 through the merger of three major outdoor operators owned by APN News & Media. In 2012, the company's Australia and New Zealand assets were spun out into a joint venture between Quadrant and APN News & Media. The private equity firm paid A$174.2 million for a controlling stake, valuing the entire business at A$272 million.
Earlier this year Quadrant took full ownership APN, paying APN News & Media A$69 million for its remaining stake.
APN claims to have a 27% share of the Australian outdoor advertising market and 26% in New Zealand. It is one of four major operators, alongside JCDecaux, Adshel and oOh!Media. The latter is owned by CHAMP Private Equity. These four players account for about 80% of industry revenues in Australia, which came to A$544 million last year. New Zealand revenues were NZ$76 million.
As of December, APN's portfolio is expected to include: 34 large format digital billboards, around 2,800 static billboards, 33,300 advertising panels in buses and trams, 2,000 panels in trains and 1,000 panels in airports. The company is undergoing a general transition to digital solutions and expected to have 51 large format digital panels by the end of 2015.
APN posted revenues of A$225.9 million in 2013, up from A$207.8 million in 2012. It forecasts A$245.5 million in 2014. EBITDA has grown from A$27.8 million in 2012 to A$33.8 million last year and is expected to reach A$43.3 million in 2014. Forecast net profit for the year is A$20 million, up from A$14.3 million in 2013 and A$10.5 million in 2012.
Quadrant has made partial exits through two other IPOs in 2014 - media monitoring company iSentia raised A$283.6 million while Burson Auto Parts raised A$220.3 million. This followed a full exit via in-vitro fertilization specialist Virtus Health's A$338.7 million offering in 2013.
There have been 16 IPOs by private equity-backed companies in Australia and New Zealand so far this year, raising record proceeds of $5.5 billion. This compares to $3.3 billion from 12 offerings in 2013.
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