NEW YORK, April 16, 2020 /PRNewswire/ — OUTFRONT Media Inc. (NYSE: OUT) today announced that affiliates of Providence Equity Partners LLC (“Providence”) have agreed to lead the purchase of $400 million in newly issued convertible preferred stock together with funds managed by Ares Management Corporation (“Ares”).

“We recognized the value of liquidity and collaboration as we look through these uncertain times and consider the exciting growth opportunities that will arise in our industry,” said Jeremy Male, Chairman and Chief Executive Officer of OUTFRONT Media. “Our board was pleased to select Providence and Ares for their industry knowledge and expertise, and we believe that all of our stakeholders will benefit from their long-term investment and commitment.”

Financial Terms

• $400 million of convertible, perpetual preferred stock, which is convertible into shares of OUTFRONT Media Inc. common stock at a conversion price of $16.00 per share
• The preferred stock carries a 7.0% dividend, which will be payable at our option in cash or in-kind
• On an as-converted basis, the preferred stock will represent approximately 14.8% of our common shares outstanding
• In connection with this transaction and subject to relevant approvals, we expect to appoint Michael J. Dominguez, Managing Director at Providence, as a new director to our board
• We expect to use the net proceeds from this offering for general corporate purposes

“We are delighted to partner with OUTFRONT through this challenging economic environment and beyond,” said Dominguez. “We are very familiar with their business and the industry from our over 30 years of specializing in media, and we believe the company has premier assets, attractive long-term fundamentals, and an exceptional leadership team.  We believe that the steps OUTFRONT has taken to enhance its liquidity position will help ensure that the business can operate successfully and opportunistically with a strong balance sheet.  We look forward to working with the management team and the board to create lasting value for all stakeholders.”

“We are excited to work with two world-class organizations in OUTFRONT Media and Providence Equity Partners,” said Scott Graves, Partner, Co-Head of Private Equity and Head of Special Opportunities at Ares. “We believe OUTFRONT is a well-established industry leader with both top quality assets and a highly talented management team.”

Goldman Sachs & Co. LLC acted as our exclusive placement agent and Jones Day acted as our legal advisor.  Providence was advised by Evercore and Weil, Gotshal & Manges LLP. Ares was advised by PJ Solomon and Paul, Weiss, Rifkind, Wharton & Garrison LLP.

Insider’s take:  Win-win.  OUTFRONT reduces financial risk.  Providence and Ares get a 7% dividend with the right to convert to 15% common stock ownership if the stock takes off.  The market liked what it heard.  The reduced risk from having $400 million of cash offset the impact of potential stock dilution.  OUTFRONT stock finished the day up 6% while the S&P was up 1%, Lamar was up 3% and Clear Channel Outdoor declined by 4%.

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