APN Outdoor and oOh!media have announced the two companies have entered into a Scheme Implementation Deed, under which the two companies will merge to become a singular out-of-home media juggernaut.
The transaction, to be implemented in April 2017, will see the two combine their portfolios assets and reach 8,985 digital and 63,2000 classic screens and panels in the metro and regional locations.
The merger is forecast to achieve cost synergies of at least $20 million per year, with the merged group boasting a pro forma market capitalisation of approximately $1.6 billion. The merged group for FY16 claim a profit of $171 million.
The merged group will combine management teams and boards, with eight directors, four from each company board. Doug Flynn will be appointed the group’s chairman, Brendon Cook appointed the CEO and managing director, and Wayne Castle as chief financial officer.
The move will see the departure of APN Outdoor CEO Richard Herring, with Flynn saying, “Due to the compelling nature of the transaction for shareholders, Richard has agreed to stand aside to facilitate this attractive merger.
“After 16 years as a chief executive and 22 years in the out-of-home industry, Richard is keen to explore other opportunities in the business world.”
oOh!media CFO and COO, Peter McClelland, will also step aside to facilitate the merger.
“The merger of APN Outdoor and oOh!media is a compelling opportunity for all shareholders,” Flynn said.
“The businesses bring together complementary asset portfolios across key formats in metropolitan and regional markets to create a leading and diversified out-of-home and digital online media group in Australia and New Zealand.”
Anderson added, “The combination of these businesses will create an attractive media offering, supported by a passionate and experienced team.
“We believe the amount of cost synergies expected to be generated, and the resulting EPS accretion will create substantial value for both shareholder groups.
“We are pleased that the enhanced balance sheet strength and financial scale, together with increased funding opportunities, will support the merged group’s ability to pursue future growth and digitisation opportunities.”
As part of the transaction, APN Outdoor and oOh!media have agreed that both companies will cap final dividends for the year ending December 31 2016 at 12.5 cents and 10 cents per share, respectively.