I talked with Gabe Oliverio of outdoor investment banking firm Johnsen Fretty about outdoor values. Sounds to Insider like now is a good time to sell your company.
Seems like values are 5-6 times run rate revenue and 8-12 times run rate cashflow in the outdoor advertising market. What’s your view?
Very generally speaking, revenue multiples seem about right, though I’m always very hesitant to think of valuation in terms of revenue multiples. A great billboard in Indy might have an 18% lease cost, while a great billboard in New York might have 55% cost. Should their revenue multiples be comparable? Billboard cash flow multiples for premier inventory/plants gravitate toward the 9-12x range. Again, this a very general comment. Often times when we represent a seller, we position metrics so they take into account things like digital conversions and/or future revenue bookings. Things like that can change a cash flow metric dramatically.
Any trends in acquisitions during the second quarter?
It is still a very active market for acquisitions, which we see continuing for the foreseeable future. In any spot in the U.S. buyers are very aggressive for quality assets.