JCDecaux Buys Outfront Media’s (former CBS Outdoor) LatAm Business
What: OUTFRONT Media Inc. and JCDecaux SA have entered into an agreement to sell the Latin America business of OUTFRONT Media to JCDecaux Latin America / Corameq, which is 85% owned by JCDecaux SA.
Why it matters: OUTFRONT Media's Latin America business operates approximately 11,390 total displays across Mexico, Chile, Uruguay, Brazil and Argentina, mainly in the large format and bus advertising segment. As a result of the transaction, JC Decaux will operate more than 55,000 thousand ad displays in Latin America and significantly reinforce its leading position in Mexico.
OUTFRONT Media Inc., formerly CBS Outdoor, and JCDecaux SA have announced that they have entered into an agreement to sell the Latin America business of OUTFRONT Media to JCDecaux Latin America / Corameq, which is 85% owned by JCDecaux SA. The purchase price is US$82 million cash, subject to working capital and indebtedness adjustments. The transaction is expected to close in the first half of 2016, subject to customary closing conditions including regulatory approval.
As of December 31, 2014, OUTFRONT Media's Latin America business operated 11,390 total displays across Mexico, Chile, Uruguay, Brazil and Argentina, mainly in the large format and bus advertising segment. Revenues for the year ended December 31, 2014 were US$72.5 million. In October last year CBS Outdoor changed its name to OUTFRONT Media.
The acquisition of OUTFRONT Media's Latin America business is a strategic move for JCDecaux as it will reinforce significantly its leading position in Mexico, the 15th largest economy worldwide and the 2nd in Latin America, and consolidate the very fragmented Latin America Outdoor Advertising market with great opportunities to accelerate the ongoing digitization of outdoor media assets. With this acquisition, JCDecaux will confirm its number one position in Brazil and Chile and will become the market leader in Uruguay. The Group will be present in the 10 wealthiest cities in Latin America: Sao Paulo, Mexico City, Buenos Aires, Rio de Janeiro, Santiago, Bogotá, Lima, Brasilia, Monterrey and Guadalajara.
There is an opportunity in consolidating the very fragmented Latin American Outdoor Advertising market with opportunities to accelerate the digitalization of outdoor media assets.
Jean-Charles Decaux, Co-Chief Executive Officer of JCDecaux, said: "The acquisition of OUTFRONT Media's Latin America business is a key milestone in our development on this continent, strengthening our No. 1 outdoor advertising position in the region with a strong platform to further accelerate our investment and development based on internal and external growth opportunities. With more than 55,000 advertising displays in Latin America, JCDecaux will even better serve cities and citizens, while providing exceptional visibility to the advertisers and their brands in 29 cities of more than one million inhabitants. In this unprecedented period of consolidation in Latin America, JCDecaux will be pleased to welcome OUTFRONT Media Latin America teams as the great work that has been performed to date will be key to continue growing in the different countries."
OUTFRONT to concentrate on Canadian Business
Subsequent to the close of the transaction, OUTFRONT's international business will consist exclusively of its operations in Canada where, as of December 31, 2014, it operated 5,984 displays, including the Street Furniture operations in Vancouver in partnership with JCDecaux, and generated revenues of $82.5 million for the year ended December 31, 2014. The bulk of OUTFRONT Media's Business is in the United States. In October last year CBS Outdoor changed its name to OUTFRONT Media.
Jeremy Male, Chairman and Chief Executive Officer of OUTFRONT Media, said: "The sale of our Latin America business is firmly in line with our strategy to increase focus on markets where we maintain a leadership position. Our operations will be in excellent hands under JCDecaux's stewardship."