UK Outdoor Advertising Company
Spencer Partners Corporate Finance Limited is delighted to have successfully completed its lead advisory role on the sale of one of the UK’s main independent outdoor advertising companies, Excel Outdoor Media Limited (“the Company”).
The Company specialises in the business of roadside advertising and had developed the leading independent portfolio of premier outdoor advertising panels within the Greater London area.
Spencer Partners directors Tim Godwin and Richard Ingram worked on the sale mandate over a period of some six months - providing corporate finance advice to the Company and to its shareholders in preparing the Company for sale and negotiating with the purchaser.
In recent years the outdoor advertising sector has continued to grow in the UK, both in real terms and as a proportion of total display advertising. However, this growth has been driven by new formats and new advertising media and this has masked the continuing levels of intense competition and ongoing consolidation in the sector.
An early task for Spencer Partners was to deal effectively with a pre-existing right of first refusal between the Company and the eventual purchaser. On behalf of the sellers, Spencer Partners complied with the terms of the right of first refusal, giving written notice of the shareholders’ intention to sell their shares in the Company. At the same time, Spencer Partners prepared a detailed Sales Memorandum, in order to demonstrate to the potential purchaser that, in the event that an attractive offer was not received, the sellers were prepared to approach a number of other potential buyers. Spencer Partners had already undertaken the necessary research to identify and qualify a range of suitable alternative buyers. After presenting the opportunity to buy the Company’s shares, Spencer Partners successfully engaged the purchaser in negotiations that eventually led to the sale of the Company on terms with which the sellers were very pleased.
Prior to this, Spencer Partners' preliminary strategic input had consisted of helping to prepare the Company for sale and presenting the Company in the most favourable light. This included assisting in the re-negotiation and consolidation of various contracts of the Company prior to the sale. Mike Hawkes, one of the major shareholders in the Company, noted: “In retrospect, had we spoken to Spencer Partners six months earlier than we did, we believe that their help would have further enhanced the value of the Company”.
Spencer Partners’ fee structure included a leveraged success fee based on exceeding the shareholders’ target price. The interests of Spencer Partners were therefore closely aligned with those of the selling shareholders. Mike Hawkes commented: “The success fee uplift was beneficial to all concerned, as it ultimately led Spencer Partners to exceed our expectations in terms of the price that we obtained for the Company. We were delighted to pay Spencer Partners more than we expected, as it meant that we had achieved a sale price higher than we had initially hoped for”.
Legal advice on the sale was provided by Spencer Partners' associated business, Hewitsons Solicitors. In the view of Mike Hawkes: “The close working relationship between Spencer Partners and Hewitsons was very helpful to us in ensuring that the sale progressed smoothly and effectively”.