On last week’s Bell Board podcast Billboard Insider’s Dave Westburg made three predictions for the US out of home industry.
Clear Channel goes public as a REIT within 5 years
Let me make a prediction: Clear Channel Outdoor is going private in the Mubadala Capital transaction, and I predict it will be back as a public REIT within five years. Mubudala is going to take them private, pay down the leverage — you really need to be three to five times debt-to-cash-flow to qualify as a REIT — and then take them back public as a REIT as soon as they can, to get a nice payday. So I’m willing to bet Clear Channel Outdoor will be back as a public entity within five years.
Huntington Outdoor goes public some day
As for the independents, my prediction is that Huntington Outdoor may go public at some point in my lifetime. Look at the way they’ve been growing — it’s just remarkable what Justin Powell at Huntington has been able to do. They grew several thousand billboards last year, not all by acquisition but by internal growth. So I think we’re going to see Huntington Outdoor continue to grow.
Adams sells within a couple years
As long as I’ve been doing this there has been consolidation, and here’s another prediction: I think Adams Outdoor is going to sell within the next couple of years. It’s just the nature of the situation. They’ve been on a real growth tear and have been doing a lot of acquisitions, but at some point their institutional investors — who typically have a five-to-seven-year investment horizon — are going to want a return. And Lamar has talked about having more than $1 billion of dry powder. What might that get used for? That could be an answer.
Billboard Insider’s take: After reflection we remain confident that Clear Channel Outdoor goes public again and that Adams sells. We are less confident that Huntington will go public. May is not will. We expect Huntington to continue to grow rapidly but wonder if the Powell entrepreneurs will want to put up with the extra regulations and costs of being public. Reagan isn’t hurt by private status. Same goes for Huntington.
What are your predictions for the out of home industry? Email davewestburg@billboardinsider.com or use the comment box below and we’ll run a follow-up article.
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