Boston Omaha Sponsors $200 million IPO

Boston Omaha, the parent of Link Media Outdoor has filed an S-1 with the SEC to raise up to $200 million in a public offering of equity in  a Special Purpose Acquisition Company (“SPAC”) named Yellowstone Acquisition Company.  The new entity will be a wholly owned subsidiary of Boston Omaha.  Here are the reasons for the offering.

  • Boston Omaha intends to use its existing capital for the three traditional business lines Boston Omaha currently operates in outdoor advertising, surety insurance and fiber-to-the-home broadband services as well as other future potential acquisitions and investments. By teaming with other investors in the potential SPAC offering, the sponsor would be able to pursue business combinations with larger companies than Boston Omaha could pursue currently on a stand-alone basis.
  • There are many owner-operated businesses interested in minority owners for growth capital. Boston Omaha has invested in a number of these types of businesses. However, Boston Omaha’s ability to acquire a significant equity stake in a larger business through a business combination is limited by the Investment Company Act of 1940, which requires a company which holds more than 40% of its assets in minority investments in other businesses to register under the Investment Company Act…
  • Acquiring a large percentage of equity in certain businesses, such as regulated financial institutions, would require Boston Omaha to comply with very burdensome and expensive regulations which would both limit its overall business operations due to capital and other financial testing covenants and adversely impact its ability to acquire other businesses which would not otherwise be subject to these regulations.

Insider’s take:  Boston Omaha continues to build it’s war-chest.  The transaction will enable Boston Omaha to do larger transactions and to take minority stakes in businesses without triggering regulation under the Investment Act of 1940.  The Investment Act of 1940 is a draconian set of operating, financial and reporting rules which apply primarily to mutual funds and investment companies.  Operating companies want to avoid Investment Act designation at all costs.

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  1. For some reason you have stop sending me Billboard Insider. Why I don’t know. I have signed up for it again with no response from you. What’s the problem?