LONDON: Ocean Outdoor Limited has acquired Visual Art, a Sweden based independent, pure-play digital, out-of-home media and tech group operating in three Nordic countries and Germany.
The deal is structured as two simultaneous transactions in which Ocean acquires the out-of-home assets of Visual Art (Visual Art Media) for a total consideration of approximately €63 million in cash and partners with the operators of Visual Art to form a 50-50 digital signage technology joint venture (Visual Art Technologies) following a €15 million investment by Ocean.
The acquisition of Visual Art Media extends Ocean’s digital out-of-home (“DOOH”) presence into Northern Europe adding Sweden, Denmark, Finland and Germany to the company’s premium DOOH portfolio operating in the UK and the Netherlands.
Visual Art Media is Sweden’s largest pure-play digital out-of-home operator with more than 260 locations across a mix of retail, rail, airport and leisure destinations in 41 key cities including Stockholm, Gothenburg and Malmö. In addition to Sweden, which represents approximately 85% of 2019E revenue, the company operates emerging growth businesses in Denmark, entered Finland in 2018 and signed a retail OOH partnership with Unibail-Rodamco-Westfield Germany in December 2018 in 15 shopping malls including Berlin and Munich.
Visual Art Media’s combined portfolio is approximately 95% digital today. The company, which employs 140 people with offices in seven countries, will continue to operate under its management team led by CEO Andreas Lind, supported and powered by the Ocean brand.
The entry into these markets through Visual Art’s high growth digital portfolio is a natural extension of Ocean’s Digital Cities for Digital Citizens out-of-home philosophy into highly attractive geographies at the forefront of technological and digital innovation. Sweden in particular, as Visual Art Media’s core driver, along with Denmark and Finland, have similarly strong underlying industry dynamics to the UK and the Netherlands.
Visual Art Media’s partnership with Unibail-Rodamco-Westfield in Germany compliments Ocean’s long term partnership with an important landlord. In the UK, Ocean holds exclusive external rights to two of the largest premium urban shopping malls in Europe, Westfield London and Westfield Stratford.
Visual Art will receive total consideration of approximately €63 million in cash for Visual Art Media, and a performance-linked earn-out if growth performance targets are met overtime for Denmark, Finland and Germany collectively.
Visual Art Technologies designs, produces, installs, broadcasts and operates cutting edge, high tech-enabled digital signage systems globally. The business operates in 24 countries, with over 4,300 locations and over 25,000 screens for clients in all sectors, including food, fashion, finance, automotive, telecom, hospitality, and pharma, amongst others.
Through its €15 million investment, Ocean will own 50% of Visual Art Technologies in a joint venture with the former owners of Visual Art to create a complementary, and high growth, tech business line that will drive significant synergies and opportunities across the full out-of-home and signage portfolio.
Commenting on the transactions, Ocean CEO Tim Bleakley said: “Visual Art Media is an attractive business that we have long admired. The company combines great people with great assets in growing DOOH markets, offering impressive opportunities across a number of different business areas and multiple countries.
“This acquisition creates an enhanced offering which benefits all stakeholders, landlords, municipalities and advertisers along with the media and specialist agencies. We look forward to working with the management teams at Visual Art to combine their expertise with the Ocean brand and our digital cities for digital citizens philosophy.”
The transactions are funded through Ocean’s cash on hand and are immediately materially accretive to free cash flow and EPS, reflecting the attractive standalone growth potential of the assets, even before the benefit of potential group-wide synergies.
Ocean continues to see additional attractive uses to deploy capital through M&A, and these transactions further reinforce Ocean’s focus on its three core strategic tenets of driving organic growth, technical innovation and accretive inorganic consolidation.
Edited by Nayyar Iqbal