CBS Outdoor Completes Acquisition Of Van Wagner Assets

CBS Outdoor has completed its acquisition of most of the outdoor advertising assets of Van Wagner Communications, the company announced today, creating the country's second-largest outdoor advertising company in terms of billboard assets, after Clear Channel Outdoor. This is CBS Outdoor's first major acquisition since it was spun off as a stand-alone company by CBS Corp. in June of this year.

The $690 million deal, first announced in July, gives the newly independent CBS Outdoor control of 1,094 large-format billboard displays across eleven top markets, along with 8,386 other outdoor ad displays of varying sizes across the U.S. According to CBS Outdoor, these signs produced total ad revenues of $206 million for Van Wagner in 2013. The acquisition was funded with a combination of cash on hand and new debt for CBS Outdoor.

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The acquisition should increase CBS Outdoor's value as a real estate investment trust, or REIT -- a corporate structure that should allow the company to avoid most federal income tax, as long as it pays out 90% or more of its earnings in the form of dividends to shareholders. According to CBS, over 90% of the new revenues from the Van Wagner acquisition will come from assets eligible for REIT status.

Meanwhile, Van Wagner is staying in the out-of-home ad business, focusing on its sports and entertainment group, as well as its blimp and aerial division.

In September 2012, Van Wagner acquired blimp advertising operator Lightship Group and its fleet of 19 blimps, which feature a unique internal lighting system. The acquisition also included American Blimp Corp., which makes the blimps for Lightship. The acquisition augmented Van Wagner's Aerial Media Group, which operates banner-towing airplanes.

Elsewhere in the outdoor ad business, in August Lamar Advertising Co. purchased Marco Outdoor Advertising, which owns over 150 signs around New Orleans, strengthening Lamar’s presence in the south. Like CBS Outdoor Lamar is also converting itself into an REIT.

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