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Van Wagner's Billboard Unit Acquired by CBS Outdoor

Date:23-07-2014

CBS Outdoor Americas Inc said that it would acquire outdoor advertising businesses from Van Wagner Communications, for $690 million in cash. Van Wagner Communications is a privately held company with outdoor advertising in New York's Times Square and on buses on the Las Vegas strip.

CBS Outdoor said that this deal includes around 1,100 large-format billboard displays in 11 United States markets, which in 2013 had total revenue of $206 million.

CEO of CBS Outdoor, Jeremy Male said that the deal gives a tremendous boost to their assets and that the billboards are in really iconic locations which they think will be significantly additive to their portfolio in the United States.

Jeremy Male added that there would be a great upside in converting some of Van Wagner billboards to digital billboard technology. Around 1.5 percent of CBS' billboards are digital, which is about the same percentage as Van Wagner's, and accounts for about 10 percent of CBS' billboard revenue.

According to sources, Van Wagner was exploring a sale that could fetch over $600 million and that CBS Outdoor was one of the companies interested in purchasing the assets.

This deal is subject to regulatory review and is expected to close early next year. Jeremy Male added that it will be immediately add to adjusted funds from operations per share in the mid-single-digit range in percentage terms.

CBS Outdoor whose customers include Sony Corp, Apple Inc and McDonald's Corp went public in late March after it was spun off from CBS.

In the United States, the CBS has around 329,100 displays and approximately 26,100 displays across Latin America and Canada.

Some Van Wagner employees will be hired by CBS Outdoor. Van Wagner will keep its sports consulting arm and blimp business, which works with over 200 professional and United States college teams.

CBS Outdoor was advised by Peter J. Solomon, Centerview Partners and Goldman Sachs GS.N. CBS Outdoor’s legal adviser was Jones Day. Onera Media and Evercore Partners advised Van Wagner and its legal adviser was Fried Frank Harris Shriver & Jacobson.

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