July 21 (Bloomberg) -- CBS Outdoor Americas Inc., the billboard company spun off from broadcaster CBS Corp., agreed to acquire some advertising assets from Van Wagner Communications LLC for $690 million in cash.
The purchase gives CBS Outdoor about 1,100 large billboard displays in 11 U.S. markets, according to a statement today. The deal requires regulatory approval and is expected to be completed next year.
Chief Executive Officer Jeremy Male said earlier this year that CBS Outdoor intends to acquire smaller billboard companies as it competes with Lamar Advertising Co. and Clear Channel Outdoor Holdings Inc. The assets acquired from closely held Van Wagner generated $206 million in revenue last year, New York-based CBS Outdoor said.
“This deal might spark further consolidation in the outdoor advertising sector,” said Paul Sweeney, an analyst at Bloomberg Intelligence. “CBS Outdoor, Clear Channel Outdoor and Lamar Advertising together control more than 85 percent of the industry’s revenue but there are still several regional companies that can be rolled up.”
CBS Outdoor shares have advanced 23 percent since the company’s initial public offering in March. They rose 4.5 percent to $34.52 at the close in New York.
CBS Outdoor raised $644 million in the IPO including the over-allotment and has converted into a real estate investment trust. Last month, CBS Corp. took the final step in the spinoff of the billboard company, with a plan to fully divest its 81 percent ownership.
Centerview Partners LLC, Peter J. Solomon Co. and Goldman Sachs Group Inc. served as CBS Outdoor’s financial advisers, while Jones Day acted as legal counsel. Evercore Partners Inc. served as Van Wagner’s financial adviser and Fried Frank Harris Shriver & Jacobson provided legal counsel.
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