Billboard Values

Drachman says outdoor values 8-14 times cashflow

Max Drachman is an outdoor industry investment banker with Kalil and Co. We talked recently with Drachman about the M&A market last week.

What transactions have you closed recently Max?

So far this year we have closed seven Outdoor deals. Our most recent closing was the Lindmark/Newman deal in New Mexico. Newman had owned the plant since the 1970s, and grew to be the largest independent billboard company in the state. With this deal, Lindmark has become one of the largest independents in the Southwest with coverage from New Mexico to Oklahoma.

What trends are you seeing in the market?

The market remains strong. There are still new buyers entering the space, and we now have private equity chasing several of our deals. It has been a very busy and exciting year so far. We have a few deals in the hopper set to close in the next several weeks that will be newsworthy.

When do you think we’ll see the next round of Clear Channel Outdoor sales?

Good question. Clear Channel is a difficult group to figure out. Yes, they sold a chunk of assets earlier this year, but we still see them aggressively pursue acquisitions in their larger markets. I’ve heard several times that they are going to sell another tranche of markets, however I’m not sure that I’ve ever heard it from someone in an official capacity with direct knowledge of their game plan. At the end of the day, they have great assets. If they ever need to pull some more chips off the table, there will be demand.

Where are outdoor values?

Values remain strong. We are still selling assets between 8 and 14 times BCF. The 8x deals tend to be rural with a lot of wood signs and short leases, and the mid-teen multiple deals tend to be major markets, with exemplary lease portfolios, and solid market-share.

What is BCF?

Gross ad revenue less lease cost, sales commissions, maintenance, repairs, property taxes, electricity and permit costs.

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