Standard Diversified the public tobacco, vaping, insurance and out of home company sold Standard Outdoor, LLC to Billboards LLC, an affiliate of Standard General L.P.  The spinoff is part of a plan of reorganization.  Here’s what Insider has learned from Standard’s April 13, 2020 Sale announcement, 2019 10k and first quarter 2020 10Q

• Standard Outdoor has 180 billboard structures with 579 faces in Georgia (399 faces) Florida (87 face), Alabama (82 faces), Texas (8 faces) and South Carolina (3 faces).
• The sale price was $9.79 million consisting of the assumption by Billboards LLC of $7 million in debt and the issuance of stock valued at $2.8 million.  This is a huge discount from management’s value estimate of $17 million for Standard Outdoor in an August 2019 Investor Presentation.  The price works out to $54,000 per billboard structure or a low 3.5 times 2019 revenue.
• Standard Outdoor revenues increased by 15% to $2.8 million during 2019 due to billboard acquisitions.  Expenses and cashflow are not broken out in Standard Diversified’s financials.

Insider’s take:  Standard Diversified spun the out of home assets into a new entity to shield it from the troubles impacting the company’s vaping/smoking/insurance business.  The company’s New York insurance business is in the midst of a liquidation.  The vaping/smoking business has financial and regulatory troubles.  Standard Outdoor’s valuation is absurdly low although it doesn’t matter too much because the buyer and the seller are the same entity.

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