Ocean Outdoor expands into the Netherlands with two acquisitions
Ocean Outdoor Ltd
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07:45 20/03/24
Ocean Outdoor has acquired Interbest and Ngage Media - two leading digital out-of-home (DOOH) companies operating across the Netherlands - for a combined cash consideration of around €51m, it announced on Tuesday.
The London-listed firm described Interbest as the country's biggest independent roadside operator, with 88 digital and static OOH masts in prime locations on the busiest road and motorway networks.
Its portfolio covered all Dutch municipalities, including the Randstad megalopolis of Amsterdam, Rotterdam, Utrecht and The Hague.
Ngage Media, meanwhile, is a pure-play digital operator with 76 large full motion digital screens in 50 locations across the Randstad megalopolis.
Ocean Outdoor said the combined portfolio, which was currently 60% digital with a “clear path” toward further conversions and development, would have reach across all Dutch municipalities.
For the 2018 full year, the two businesses combined delivered net revenue of €25.7m and adjusted EBITDA of €7.4m, based on unaudited accounts.
The transactions would see Ocean Outdoor expand into a “highly attractive market”, with similarly strong underlying industry dynamics to the UK, extending its ‘Digital Cities for Digital Citizens’ out-of-home philosophy into continental Europe.
Ocean’s board said the entry into the Netherlands via two simultaneous acquisitions created an immediate scale platform, with a “robust” digital growth profile ahead, and provided the ability to realise synergies over time.
The companies were based in Amsterdam and the Randstad, and would continue to operate under their respective management teams, supported and powered by the Ocean brand.
Ocean said the transactions valued Interbest and Ngage combined at a 31 December last 12 months multiple of 6.9x adjusted EBITDA, before any benefit from synergies.
Interbest and Ngage would receive total consideration of approximately €51m in cash, and a performance-linked earn-out if growth performance targets were met over time.
Ocean said it expected the delivery of performance targets and synergies to further enhance the transaction.
The acquisitions were funded through Ocean's cash-on-hand, and would reportedly be immediately highly accretive to free cash flow and earnings per share, which the board said reflected the “attractive standalone growth potential” of both assets, even before the benefit of potential synergies.
Ocean said it continued to see additional attractive uses to deploy capital through mergers and acquisitions, with these transactions further reinforcing its focus on its three core strategic tenets of driving organic growth, technical innovation and accretive inorganic consolidation.
In addition to mergers and acquisitions, the board said it was continuing to review its capital position and the best use of resources, which could include a return of capital to shareholders.
The company said it expected to provide further feedback with the release of its full 2018 financial results on 19 March.
“We are delighted to announce these acquisitions which offer an exciting opportunity to expand Ocean into continental Europe,” said chief executive officer Tim Bleakley.
“These are two attractive businesses with very clear, complementary digital strategies with talented and focused management in different spheres of the out-of-home sector.
“Their acquisition will create an enhanced offer which benefits all stakeholders, landlords, municipalities and advertisers along with the media and specialist agencies.”
Bleakley said Ocean had established a “strong track record” of unlocking the true value of acquired businesses.
“We plan to accelerate both company's development plans, aligning the businesses within their own markets by sharing DOOH expertise and fast-tracking investment.
“Ocean has developed a strong, long term relationship with the management teams who were among the first international partners in Ocean's Alliance network.
“We are really looking forward to working even closer with them on this next stage of the Ocean voyage.”