APN grows Outdoor with PE partnership

APN News and Media aims to overturn its full-year loss of $45 million by focusing on its big earner, the outdoor advertising market. Earnings for APN’s Outdoor division rose nearly a third before the 50 percent joint venture with Quadrant Private Equity was finalised.

The new venture is expected to generate around $190 million for APN and valued the company’s outdoor advertising division at $272 million at the time of transaction. The join venture will retain all current APN Outdoor employees and management.

Given that earnings for its ANZ newspaper arms fell by a quarter, the media group hopes to capitalise on Outdoor’s strong performance. The net loss for 2011 takes into account the $159 million impairment charge for restructuring its New Zealand newspapers, compared to the net profit of $93.7 million recorded the prior year.

The arrangement with Quadrant further bolsters APN’s aggressive growth plans, Richard Herring (pictured), CEO of APN Outdoor said. The venture allows for further expansion within the outdoor advertising segment in Australia, New Zealand and Asia.

“We are excited about the prospect of growing APN Outdoor with Quadrant. APN Outdoor has had an exceptional 2011 with strong operational performance reflected in impressive growth against all of our key financial metrics.

“We were successful in winning a number of major contracts, including Perth Airport and Brisbane City Council Buses and acquired OGGI Billboards in New Zealand. Advertisers continue to turn to the Outdoor advertising segment to reach a broad cross-section of consumers,” he said.

APN Outdoor will retain its name as it incorporates all of APN’s wholly-owned trans-Tasman Outdoor businesses as well as it’s 50% interests in Rainbow Premium Outdoor, in Indonesia. Falling outside the scope of the new JV is APN’s co-owned Adshel street furniture business, and Buspak and Cody businesses in Hong Kong.

Herring is confident about the industry’s prospects with improved panel quality and the connection opportunities of current signage linking consumers with smart phone interactivity.

“APN remains at the forefront of digital roll-out in Australia, a position which will be augmented through the formation of this joint venture. I look forward to building on our track record of innovation, expansion and profitable growth,” Herring said.

Brett Chenoweth, CEO of APN, will chair the newly structured division and each partner will be represented equally on its Board of Directors.

Given the changing media landscape outdoor advertising has become one of the fastest-growing media sectors, Chris Hadley, managing director of Quadrant Private Equity said.

“We believe a well capitalised business will be able to further drive innovation and capitalise on growth opportunities to thrive in the evolving media landscape.