• Standard Diversified Spins Off Standard Outdoor

    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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