At last week’s Morgan Stanley Tech, Media and Telcom conference Lamar CEO Sean Reilly explained the rationale for the T-Mobile-Vistar deal.  Reilly also pointed to Geopath challenges and said Lamar is back in the M&A market.  Here’s a selection of Reilly’s comments, analyzed by SignValue.

The Vistar sale

First of all T-Mobile is an extremely entrepreneurial organization…This is not your daddy’s phone company…They love out of home. They really do and I had…mixed emotions about the Vistar deal because we had a seat on their board.   We gleaned unique insights because of that because of our access to their data…But it’s nice to turn $30 million into $130 million…T-Mobile plans on running Vistar exactly the same way that it’s run today…It’s going to be branded Vistar.  The whole management team went over there.  They’ve got golden handcuffs on them – three-year contracts – which again gives me comfort that it’s not going to get…the big company bear hug and get screwed up…T-Mobile couldn’t be a better buyer for our industry because the industry today buys its data from third party vendors that get their data from T-Mobile…so now we get go straight to the source. T-Mobile is cutting out the intermediaries and they’re selling directly to the industry…I think they see it as a way to more effectively monetize their data that’s that’s what and and they bought the right platform.

Geopath issues

Geopath, our industry measurement tool, does a bad job pure and simple …they’re buying their data from vendors that are not the greatest in the world and the data is stale, and old in some cases inaccurate…

Lamar expects at least $150 million in 2025 acquisitions

There’s a really good pipeline of the smaller fill-in deals – you know $20 to 45 million –  they’re coming through the door and then we have a couple that are north of $100 million…We knock down one of those we’ll blow by that $150 million – I kind of throw that out as a placeholder and and if we exceed that that’ll be a good thing…

SignValue’s Take: Lamar’s back in the M&A market.  Reilly expects at least $150 million in transactions, maybe more.  Lamar could finance $1 billion in acquisitions and still be leveraged less than 4 times.   This is the first time that we’ve seen someone talk publically about Geopath issues.  Geopath has been losing money and needs better data.  Maybe an opportunity for T-mobile or Place Exchange…

If you have questions, contact one of our consultants for a confidential consultation at info@signvalue.com or (480) 657-8400

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