oOh! Media Buys Executive Channel, Expands Office Network Reach

ECN Executive Channel Network

Acquisition of Executive Channel Follows Inlink in 2015

AUSTRALIA — oOh! Media Limited has entered into an agreement to acquire Executive Channel International Pty Ltd (ECN) for $68.5 million through oOh!’s wholly owned subsidiary, Inlink Group Pty Ltd. The acquisition will further expand oOh!’s inventory, bringing the number of buildings under management between Executive Channel and Inlink to over 630 and more than 3,500 displays across Australia.

Executive Channel Network operates a leading network of digital displays in CBD office towers and car park environments across Australia. The company, founded in Australia over 10 years ago, has installations in over 280 different venues delivering real-time content and advertising, and is underpinned by strong relationships with more than 110 property owners.

oOh! Chief Executive Brendon Cook said the acquisition of Executive Channel is an exciting opportunity for oOh! to expand its digital presence, particularly targeting the premium Central Business District (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. The combination of the businesses will deliver significant cost synergies and value creation opportunities,” said Cook. “The acquisition further enhances our position as Australia’s largest reaching digital sign network and consolidates our number 1 position in the CBD office segment. This offering increases the value we can deliver to advertisers through greater reach and more efficient targeting of audiences.

“Combining ECN with oOh!’s existing product offering represents a valuable opportunity to leverage the strengths of the respective businesses and realize 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,” added Cook.

ECN is forecast to contribute over $8 million of EBITDA to oOh! in CY2017 including approximately
$3.2 million of estimated cost synergies1 forecast to be realised in CY2017, but before any revenue synergies, one off integration costs and transaction costs. The acquisition is forecast to be approximately 3% EPS accretive in CY2017.

Completion of the acquisition is conditional on certain matters which are considered by oOh! to be largely customary working capital adjustments and conditions precedent for a transaction of this size and nature, including that 100% of ECN shareholders sign up to a sale agreement. Shareholders holding a majority of shares have executed a sale agreement, with the balance expected to sign or alternately be dragged pursuant to the ECN Shareholders Deed. ECN shareholders have pre-emptive rights under the Shareholders Deed and it is a condition precedent to the transaction that no shareholder exercise their pre-emptive rights between signing and completion. All of the conditions precedent are expected to be satisfied by the end of October 2016. Additionally, a component of the consideration is subject to certain conditions customary for a transaction of this nature.

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