CBSO Builds REIT Asset Base with $690M Deal

NEW YORK CITY—Four months after being spun off from its parent company, CBS Outdoor Americas Inc. is growing its portfolio via acquisitions with an eye toward strengthening its qualified REIT asset base.  The company said Monday that it had executed a definitive agreement to acquire outdoor advertising businesses from Van Wagner Communications LLC for $690 million in cash.

CBSO, which is in the process of conversion to a REIT, will acquire approximately 1,100 large-format billboard displays located mainly in 11 top US markets from New York City-based Van Wagner. Total 2013 revenues of the Van Wagner assets were $206 million.

Jeremy Male, CEO at CBSO, calls the Van Wagner deal “a unique opportunity that aligns perfectly with our top-market growth strategy and will enhance the scale, quality and depth of our portfolio which we believe will be great for our advertising partners. Further, we expect the Van Wagner assets to contribute significantly to our REIT operations, driving increased shareholder value.” CBSO plans to hire Van Wagner personnel to manage the enhanced outdoor portfolio.

Male's counterpart at Van Wagner, CEO Richard Schaps, says that “After having spent more than 40 years building Van Wagner's outdoor advertising business into a leading industry participant, I am delighted to be turning this division over to CBS Outdoor, a great organization with outstanding new leadership who can grow this business into the future. Van Wagner will now focus on building our Sports and Entertainment group as well as our leading Blimp and Aerial division.”

Centerview Partners, Goldman, Sachs & Co. and Peter J. Solomon Co. are acting as financial advisors and Jones Day is acting as legal advisor to CBSO. Wells Fargo has provided committed financing in support of the acquisition. For Van Wagner, Evercore Partners and Onera Media are acting as financial advisors and Fried Frank Harris Shriver & Jacobson is acting as legal advisor. The deal is expected to close in early 2015.