Talon’s view on Ocean’s £15m takeover of Signature

 

Ocean Outdoor today announced the acquisition of Signature Outdoor, the market leader in premium large format Out of Home media in Birmingham and the West Midlands. The deal, for an undisclosed sum comprising cash and shares, estimated to be worth around £15 million, strengthens Ocean’s national digital OOH footprint, particularly in the major regional centres of London, Birmingham and Manchester.

The move is an extremely positive one for Out of Home and for the strength of regional media in the UK. Digital OOH continues to grow apace (+30% in Q2) and estimated to exceed a quarter of all OOH revenue in 2014.

The synergy between the companies is significant; both are quality operators with a complementary set of premium assets. Significantly, both companies have done much over the last couple of years to raise the quality of inventory across Out of Home media.

The move could signal the start of a sustained roll-up of digital assets, concentrating the quality of digital inventory into players with a focus on development, quality and investment, as well as innovation.

We are seeing a proliferation of Venture Capital investment in the industry at present (alongside single ownership models like JCDecaux) that is a positive reflection of an expectation of growth potential. This only adds strength to the health of the industry in a time of technological change.

This is also the start of a period of significant change in Out of Home over the next two years with significant Outdoor contracts (including TFL street furniture, London Underground, Bus and other city contracts) all up for grabs.

In addition, the acquisition raises the question of digital OOH currency and trading models, with a stronger player now evident and perhaps with more consolidation to come. Talon believes that by having a more powerful player alongside JCDecaux, Clear Channel, Exterion, Primesight and other players including Forrest, MediaCo and Outdoor Plus – all with a concentration of digital OOH assets – we can begin to establish a new method of trading that better reflects the power and flexibility that digital OOH now brings.

This can enable the industry, from a sounder footing, to start to attract more revenue from online, TV and other media channels, whilst investing more heavily in opportunities that can benefit the way clients can reach and engage with their customers. A more flexible approach to trading in digital OOH is coming. We could even see the start of the 10-second digital OOH spot as a means of radically overhauling the way we use digital assets and reach audiences in ever more creative and relevant ways.

The coming together of these two impressive businesses is certainly a positive move for Out of Home in general. We expect it to be just one dynamic of an exciting advancement of change that digital OOH brings to the dynamics of mobile, location and time-based opportunities in Out of Home media in general.

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