OUTFRONT Media Inc (OUT)

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[Enterprising Investor]

CBS Outdoor Americas Inc. Announces Acquisition of Premium Outdoor Assets from Van Wagner Communications LLC (7/21/14)

NEW YORK--(BUSINESS WIRE)--CBS Outdoor Americas Inc. (NYSE:CBSO) announced today that it has executed a definitive agreement to acquire certain outdoor advertising businesses from Van Wagner Communications, LLC for $690 million in cash.

Due to technical difficulties on the part of our conference call provider earlier today, we will reconvene to host a live version of the complete conference call to discuss this transaction today at 9:45 a.m. Eastern Time. Information on how to access the conference call is provided below.

Investor Teleconference and Webcast

The Company will host a conference call to discuss this transaction on July 21, 2014 at 9:45 a.m. Eastern Time. The conference call number is 855-449-2714 (U.S. callers) and 760-536-8555 (International callers) and the passcode for both is 76348642. Live and replay versions of the conference call will be webcast in the Investor Relations section of www.cbsoutdoor.com. A telephone replay will be available beginning the same day at 1:00 p.m. Eastern Time at 855-859-2056 or 404-537-3406 and the passcode for both is 76348642.

About CBS Outdoor Americas Inc.

CBS Outdoor is one of the largest out-of-home media companies in the Americas and has a major presence in top markets throughout the United States, Canada, Mexico and South America. With traditional billboard and transit outdoor advertising properties, and a network of digital displays, CBS Outdoor gives advertisers both breadth and depth of audience across key geographies, as well as immersive ways to connect with increasingly mobile consumers. For more information, visit www.cbsoutdoor.com.

About Van Wagner Communications, LLC

Van Wagner Communications creates innovative Out-of-Home branding and advertising opportunities for world-class companies and brands through its sports and entertainment and aerial advertising companies. Van Wagner Sports and Entertainment (VWSE) is one of the preeminent sports marketing and media sales organizations in the world. It is an acknowledged innovator in property consulting and branding solutions and a global leader in naming rights, team and venue services, high-impact visible television signage, premium ticketing, sales, technology design and integrating, and in-venue content production. VWSE assists organizations and properties in creating and selling programs and media that maximize revenue potential, and helps clients develop powerful customized brand campaigns. VWSE works with more than 200 professional and college teams and some of the top sports properties in the world. Van Wagner Airship Media, with operations in five continents, owns and operates the vast majority of blimps used for advertising worldwide, including the only blimps that have external digital signage. Van Wagner Aerial media is the national leader in airplane banner display advertising. Headquartered in New York City, The Van Wagner companies employ over 300 people with additional offices in Miami, Chicago, Los Angeles, Hillsboro, Oregon and Tokyo.

Contacts

Investors:
Gregory Lundberg, 212-297-6441
[e-mail]
or
Media – CBS Outdoor:
Chad Tendler, 917-868-6899
[e-mail]
or
Media – Van Wagner:
Don Middleberg, 212-812-5664
[e-mail]

http://www.businesswire.com/news/home/20140721005668/en/CBS-Outdoor-Americas-Announces-Acquisition-Premium-Outdoor#.U80YOolOWUk

[Enterprising Investor]

CBS Outdoor and Lamar Need a New Audience (6/24/14)

Billboard companies are doing a lot of self-advertising these days.

The owners of roadside ad displays and bus-stop placards have long been the province of media investors. Now, two of the biggest players, Lamar Advertising and CBS Outdoor Americas, CBSO are becoming real-estate investment trusts, the latest examples of nontraditional properties doing so. Making the most of the switch means educating a new group of investors with different priorities. It may take a strong campaign to win them over.

REITs avoid paying taxes on U.S. income as long as they derive at least 75% of it from ownership and rental of real estate. Lamar and CBS Outdoor, which is in the process of splitting off from CBS, have both received approval to convert, although the exact timing still is unclear. Nonetheless, both have talked for more than a year about converting and already sport a REIT-like dividend yields of about 4.8% each, using estimates for 2014.

Yet they still trade at a discount to other REITs. Lamar's price is 12.8 times the low end of its 2014 guidance of adjusted funds from operations per share, a common REIT metric. That compares with average multiples north of 20 times for residential, self-storage and specialty (tower and data-center) REITs.

Lamar and CBS Outdoor aren't yet part of REIT indexes against which some funds benchmark performance. But there also are differences between their businesses and more traditional REITs that may give investors pause.

Unlike apartment REITs, billboard companies tend to own their structures but lease the land underneath them. Lamar and CBS Outdoor have substantial control over their leases, thanks to the Highway Beautification Act. Existing billboards are grandfathered in. If they were to remove them, however, no new structures could be built in their place in many cases. Cell-tower companies American Tower AMT +0.03% and Crown Castle International, CCI +0.38% which became REITs at the beginnings of 2012 and 2014, respectively, also tend not to own their land.

In addition, deals with advertisers last anywhere from 30 days to a year, versus seven to 10 years for a mall lease. This can leave billboard firms more exposed to cyclical fluctuations. Outdoor advertising revenue grew 8% a year between 2005 and 2007, but fell by 5% in 2008 and by 16% in 2009, says Wells Fargo. Revenue growth has averaged only 3% in the past four years.

Billboard maintenance spending can be quickly moderated during an economic downturn, though. Lamar reduced capital expenditure by 80% in 2009, allowing free cash flow to rise by 40% despite a 14% drop in revenue. Beyond a pickup in ad spending, Lamar and CBS Outdoor can grow by converting vinyl billboards to more lucrative digital signs and consolidating a highly fragmented industry.

Outdoor ad REITs may never achieve the heady valuations of their traditional property brethren. But with time and education, the benefits of REIT conversion should start to add up. Above all, in an environment of ultralow interest rates where yield is king, these companies certainly know what sells.

Write to Miriam Gottfried at [e-mail]

http://online.wsj.com/articles/heard-on-the-street-cbs-outdoor-and-lamar-need-a-new-audience-1403629686