News Corp buys out ad firm
Rupert Murdoch's News Corporation has signaled its entrance into Poland's media market by acquiring outdoor advertising company Town & City for an undisclosed amount.
"We think that outdoor advertising is an effective way to get into the media sector," said Bob Ennis, vice president of subsidiary company News Corporation Eastern & Central Europe. "We will be in a better position to uncover opportunities."
News Corp has spoken with radio and TV stations and advertising agencies to get a feel of the market, News Corp said. "We are making a push into the region across a range of media," Ennis said.
News Corp and Town & Country signed a definitive agreement Nov. 1, with closure expected before year's end, said Steven Buckley, co-managing partner of venture capital fund Innova Capital, which now manages Poland Partners. Poland Partners has been involved with Town & City for just over three years, with an 80% stake in the outdoor ad firm and through power of attorney, total control, Buckley said.
"News Corp was on the search for acquisitions in Eastern Europe," said Paul Latham, Town & City's president, who mentioned that talks had been going on for three or four months. Latham will remain as the company's president.
With fiscal 1999 revenue of $13.6 billion, News Corp comes with deep pockets to help finance Town & City's expansion as well as access to specialized marketing software, the company said.
"We can carry out the strategies that I wanted to carry out in the past," Latham said. Town & City is less than one-fifth the size of market leader AMS, which is publicly traded with a market capitalization of approximately zl. 129.15 million ($30.75 million). AMS boasts 37% of the outdoor ad market with just under 18,000 billboards and 6,270 city lights. In 1998, Town & City had a market share of 7.4% and plans by year's end to have 3,500 billboards. Town & Country would not forecast market share this year.
"Although we were still confident with the company and its growth," the consolidation of the global media market made it clear that it was time to take it to a different level, Buckley said.
"The pricing of the transaction was Western European multiples," Buckley said.
