• Drachman on out of home values

    Max Drachman is an out of home broker at Kalil and Co.  Drachman has this update on the out of home M&A market.

    Max, it looks like you had a busy 2017.  Can you bring us up to speed on any closings you facilitated towards the end of the year?

    Definitely.  We had a flurry of closings at year-end.  In the last couple weeks of the year, we sold Elray Outdoor in New Jersey, select assets for Southern Digital Displays in Georgia, Headrick Outdoor’s signs in Iowa, and Assign Advertising in New Mexico.  Those deals provided a solid finish to a strong 2017 for us.

    Interesting.  Can you walk us through the buyers and valuations in today’s marketplace?

    We are seeing a lot of activity essentially across the board.  Independents are active, the large strategics remain solid buyers, and new buyers are entering the space.

    Regarding valuation, most of the deals we close fall somewhere between 8x and 13x BCF.  We closed a few above that range recently based on significant upside and high demand markets.  There are deals that close below that range with the primary reason being issues in the lease and/or permit portfolio.  Right now there are more buyers than sellers, the Outdoor industry is advancing in terms of share of the advertising pie, and regulations on the local level have created significant barriers to entry.  These factors should keep Outdoor valuations healthy for the foreseeable future.

    What are you predicting for 2018?

    We see continued strength in the Outdoor M&A market for 2018.  Financing remains relatively inexpensive and widely available, and Outdoor remains a very desirable asset.  I believe it would take a macro event to our economy to cause any headwinds to Outdoor’s current positive trajectory.

    Are there any big events coming up in 2018 that you are at liberty to discuss?

    As a matter of fact, there is.  My wife and I are expecting our first child in February.




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