Hi Max, now that we are in the home stretch of 2024, how would you describe the M&A marketplace this year?

Looking back on the year so far, it felt similar to the period following the recession, such as 2013 & 2014. There was some activity in terms of smaller tuck-in deals, but the first 9 months of the year felt like the more typical acquirers were focused elsewhere on their businesses, and acquisitions became low priority. There were some headwinds, interest rates were at generational highs, and the market was still regrouping from the hot and heavy activity that took place in 2021 & 2022. When the deal market was really moving, it pulled many sellers forward, meaning those that were not serious about selling were getting a lot of calls, and in many cases the interest pushed them to market and they sold. The result left fewer sellers and less activity and the deal market slowed to a crawl over the summer. Once Q3 hit and the fed started reducing rates, buyers initiated more outreach, but it was more reconnaissance than actual shopping. At that point, the election was getting closer, and consistent with every pre-election period I’ve experienced, activity stalled awaiting the outcome.

Now that the election is over, has there been any change?

We have put over $50 million in deals under LOI in the last two weeks. These are not deals that just popped up out of nowhere, and in several cases we’ve been quietly discussing them with buyers for a few months. However once visibility into what the environment will look like going forward became clearer, buyers sprang to action and deals are coming together.

Has there been much movement in multiples?

For the most part, no. There was no dip in multiples while activity waned. The deals we closed were at valuations consistent with long-term industry norms, but there were fewer spikes where deals traded well above normal. That said, it does feel like our current engagements that are in the offer stage right now are getting some upward lift on multiples, which is another sign of the deal market coming back to life.

Generally, are there just a few buyers out there looking, or does it seem like there is a good balance of buyers and sellers?

There are more buyers than sellers, and in the OOH space we are fortunate to have many acquirers that are well capitalized and more importantly, led by good people. Compared to other verticals I’ve transacted in, Outdoor buyers tend to be long-term thinking and high-character executives. We do not see much in terms of retrading/renegotiating or unnecessary ego driven semantic back-and-forth on legal documents. Inevitably issues may occur in due diligence, but they are typically treated with cooperation between the buyer and seller as opposed to using an unexpected blemish as an opportunity to better a bargain. Right now, buyers are feeling each other out in terms of strategy when competing for assets, with some more aggressive tactics being utilized (such as high price/short fuse offers, creative proposals to enhance net value to sellers, quick closes, preemptive inquiries etc.). As buyers continue to get a better feel for the marketplace coming back, I see this helping propel an active 2025.

Speaking of 2025, Insider thinks there might be some opportunities for some larger transactions. Are you talking with new money groups interested in the marketplace? 

We are actively advising a few clients with material businesses that will come to market in 2025. Some of them have a few projects they are finishing up and others are not quite ready for a myriad of reasons, but we are confident it will be an active year. There are a few new groups exploring the marketplace but I see most of the real movement coming from the typical bellwether buyers. There are some large OOH companies that have been relatively dormant in recent years that have been conserving capital and have communicated to us their interest in expansion, so there will be several formidable acquirers at the table for sellers of strong assets.

Is there anything still negatively affecting the deal market?

From my perspective, the final piece is national revenue. For the last two years, we have continued to hear it is sporadic, with shorter term buys, unutilized holds, and generally fewer RFPs. If some of the geopolitical issues abroad conclude, and inflation remains in check, and rates continue to decline, I see brands coming back in a big way. Once national starts accelerating, it will snowball quickly and the industry could make some significant strides over the next several years.

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