OohMedia spends $68m on Executive Channel Network acquisition

Sarah Homewood
By Sarah Homewood | 11 October 2016
 

Outdoor media company OohMedia is set to acquire digital display business Executive Channel Network (ECN) for $68.5 million, with the business also kicking off capital raising to partially find the purchase.

The business revealed its intentions via the ASX this morning, with OohMedia acquiring 100% of the share capital of ECN through Ooh's wholly owned subsidiary, Inlink Group.

ECN currently reaches 294 locations in Australia, with the business specialising in the screens which feature in office buildings in lifts and lobby's showing news, the weather and also advertising.

Accoring to Ooh, this acquisition creates combined network of over 3,500 displays reaching a premium business audience of over 1.8m per week.

Ooh's chief executive Brendon Cook called the acquisition of ECN is an “exciting opportunity” for oOh! to expand its digital presence, particularly targeting the premium CBD audience that is highly valuable to advertisers.

“The acquisition will consolidate Ooh’s market leading position in the highly valuable CBD office segment. It is in line with Ooh’s strategy of driving engagement with audiences through a diversified portfolio of digital and classic screens in unmissable locations and will further enhance our digital market leadership.”

ECN is forecast to contribute over $8m of EBITDA to oOh! in CY2017 including approximately $3.2m of estimated cost synergies forecast to be realised in CY2017.

Ooh also outlined that is is launching capital raising to partially fund the purchase of ECN, by allowing “eligible institutional investors” to purchase a “placement” of some 12.6 million shares.

The placement price of $4.75 per share represents a 2.9% discount to the last closing price on 10 October 2016. The Placement bookbuild is expected to be completed today. New shares issued under the placement will rank equally with the conpany's existing shares.

“Combining ECN with Ooh’s existing product offering represents a valuable opportunity to leverage the strengths of the respective businesses and realise significant cost synergies. This will allow Ooh to build the most effective digital CBD platform to complement our existing diversified portfolio of assets to generate long term sustainable growth for our shareholders,” Cook added.

This acquisition announcement comes a few months after Ooh revealed its full year results, with the outdoor company seeing its revenue rise some 18% to $146.6 million. It also saw an increase of 53% year-on-year in profit, to $6 million for the half year up until June.

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