Billboard Investing

Drachman on Recent Outdoor Deals

Max Drachman is a outdoor advertising industry investment banker with Kalil and Co.  We interviewed Drachman about about trends in the outdoor advertising M&A market.

Max, have you closed any transactions since the last time we checked in with you in early September?

Yes, we have closed four more deals since we last touched base:

  • Boardworks’ divestiture of the majority of their plant in Atlanta.
  • Diamond Outdoor’s divestiture of signs in South Carolina and Georgia to Adams Outdoor
  • Windsor Outdoor’s divestiture in Chicago to Clear Channel
  • Impact outdoor’s divestiture of their plant in Dallas.

Could you elaborate on the story behind these deals?

  •  Boardworks  had built several very high profile locations in Atlanta.  The owner had been approached by a few prospective buyers over the last couple of years, and brought us in to facilitate the process and get the deal closed.  There was significant interest in this deal because it included some of the best signs in the market.
  • The Diamond Outdoor deal presented Adams with the opportunity of adding inventory in both South Carolina and Georgia.  Adams has more infrastructure in the area and should be able to generate more revenue by being closer to the signs with a larger sales presence.
  • The Windsor deal in Chicago was a situation that gave Clear Channel the opportunity to acquire signs with an excellent lease and easement portfolio.  The sellers were able to cash out of their remaining inventory, and Clear Channel was able to strengthen their position in one of their largest markets.  Clear Channel remains an acquirer of solid inventory in the top 20 markets.
  • Impact Outdoor has operated in Dallas since the 1980s.  They are well known for having great locations throughout the market.  They had over 300 faces in Dallas and featured a strong ground portfolio.  The owner, Terry Kafka, built the plant with the intention of owning it forever.  However as the Outdoor business evolved, he thought his signs might be better off in the hands of a company that can take advantage of advancements in digital.  There was a lot of interest in this deal as having a strong position in a market like Dallas is very desirable to buyers.  

  Any trends you’ve been seeing in the outdoor market? 

No recent trends that I believe are out of the ordinary.  Outdoor is cyclical, but the general trend for the last several decades has been nothing but positive.  I travel quite often in my line of work, and I am excited to see more and more political advertising in Outdoor.  Digital billboards have certainly given Outdoor operators the tools necessary to move quickly to take advantage of the relatively short term nature of political advertising, but I want to see more of it.  I read an article recently that estimated this year’s total political spending to top $6,000,000,000.  From local issues to national candidates, there is a ton of money floating around out there, and I’d like to see Outdoor get a larger piece of that pie. 

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