TIDMOLOT TIDMOLOW
RNS Number : 3532G
Ocelot Partners Limited
01 March 2018
Ocelot Partners Limited to Acquire Ocean Outdoor for an
Enterprise Value of GBP200 Million
Ocean Outdoor to Serve as Foundation for Future Consolidation of
Out-of-Home Media
Highlights:
-- The out-of-home media market today is fragmented and there is
a clear synergistic opportunity for consolidation
-- Ocean is a high-quality asset and the UK market leader in
premium digital out-of-home media - the ideal platform company
-- Digital out-of-home media has strong structural tailwinds
driving growth for the overall out-of-home advertising sector
-- Ocean is at the forefront of technology innovation that is
transforming the out-of-home advertising experience and return
potential
-- Ocean has a compelling growth and cash conversion profile
supported by a strong development pipeline across the UK
-- The entry valuation for this transaction is attractive
London, United Kingdom, 1 March 2018 - Ocelot Partners Limited
(LSE: OLOT / OLOW) ("Ocelot") has entered into a definitive
agreement to acquire Ocean Outdoor ("Ocean" or "the Company"), a
pure play operator of premium digital out-of-home ("DOOH")
advertising in the United Kingdom, from Searchlight Capital
Partners, L.P. ("Searchlight") for an enterprise value of GBP200
million (the "Transaction"). Upon closing, Ocelot intends to change
its name to Ocean Outdoor Limited.
In connection with the Transaction, Ocelot has requested the
suspension of the listing of its ordinary shares and warrants on
the standard listing segment of the Official List and the admission
to trading of its ordinary shares and warrants on the London Stock
Exchange's Main Market, with effect from 7.30 a.m. (London time) on
1 March 2018. Ocelot intends to seek re-admission of its ordinary
shares and warrants (subject to the outcome of the proposed consent
solicitation and meeting relevant eligibility criteria) to a
standard listing on the Official List and trading on the London
Stock Exchange as soon as practicable after closing of the
Transaction.
Ocean is a pure play operator of premium digital out-of-home
advertising in the UK. Ocean's portfolio of digital, full motion
screens facilitates connectivity as out-of-home, digital, mobile,
online and screen media all converge to create deeper brand
experiences. Ocean has created a strong reputation in developing
and pioneering new DOOH technologies, research and thought
leadership, and for facilitating creativity in digital out-of-home.
The Company has assets covering the key cities and retail centres
of the UK, including London, Manchester, Birmingham, Edinburgh and
Glasgow. Ocean operates some of the UK's most prominent outdoor
advertising locations, including Landsec's Piccadilly Lights, the
BFI London IMAX, Westfield's Holland Park Roundabout and the
Birmingham Media Eyes. Ocean's pioneering content partnerships,
such as its work with Team GB for the Summer and Winter Olympics
and its innovative collaboration with the British Fashion Council
and the BBC, represent ground-breaking initiatives for the
sector.
For the full year 2017, Ocean delivered revenue and EBITDA of
approximately GBP67 million and GBP16 million, respectively (based
on unaudited accounts). Since 2015, the Company has grown revenue
and EBITDA at a
compounded growth rate of 7.2% and 9.0%, respectively, further
supported by a strong development pipeline. For the full year 2018,
Ocean anticipates revenue growth will be in the high single
digits.
With this anchor investment in Ocean, Ocelot seeks to build a
scale out-of-home media consolidation vehicle. In addition to
supporting Ocean's organic growth initiatives, Ocelot will pursue
strategic and complementary acquisitions intended to enhance
Ocean's scale, customer offering and deepen its market leadership.
Ocelot's Founders, LionTree (the international investment and
merchant banking firm with a focus on the TMT sector, led by
founder and CEO Aryeh B. Bourkoff) and Andrew Barron (who is the
Chairman of Com Hem and has over 24 years of experience in European
media and telecoms), have strong track records of creating value
through strategic investments and acquisitions. Ocelot's Board of
Directors will take a disciplined approach to evaluating subsequent
acquisition opportunities, with a goal of identifying assets that
are scale enhancing, synergistic and value creating for
shareholders.
Aryeh B. Bourkoff, Ocelot's Co-Founder, commented, "We were
highly disciplined in our approach to evaluating opportunities for
Ocelot's initial investment. Ocean Outdoor is a great company that
can seize the opportunity to scale across the UK and Europe, with a
very strong management team that is leading the innovative, digital
and data-driven wave transforming out-of-home media. Highly cash
flow generative assets, growth and future consolidation potential
make Ocean an ideal platform acquisition."
"Outdoor is a medium in transition. Ocean has been a leader in
this transition, focused on premium digital, building capabilities
and using new technologies to deliver for their partners. We look
forward to working with the management team to accelerate this
journey" added Andrew Barron, Ocelot's Co-Founder.
Ocean's Chairman, Tom Goddard commented, "I am very excited
about the opportunities this creates for our team and for our
partners. The combined talent and experience this also brings
together will, I believe, underpin a period of sustained
growth."
Tim Bleakley, CEO of Ocean, said "The appeal of this opportunity
for the Ocean brand to be at the vanguard of championing growing
audiences, increased advertising effectiveness and creative digital
innovation for the OOH sector is compelling."
The Transaction is expected to be funded through Ocelot's cash
on hand, and senior management will re-invest a portion of their
sale proceeds into equity at closing. The Transaction is based on a
locked-box structure as of December 31(st) 2017, with a normalized
level of working capital. Post-closing, assuming the exercise in
full of Ocelot's existing warrants which would raise approximately
$140 million, Ocelot will have balance sheet cash of approximately
$290 million, plus additional leverage capacity, to pursue its
acquisition strategy. The Transaction is expected to close on 28
March 2018.
Based on the enterprise value of GBP200 million, the Transaction
represents an EV/2017 EBITDA multiple of 12.4x, in line with other
industry transactions and public benchmarks, in particular when
factoring in the full year effect of the growth in 2017. With
Ocean's compelling growth and cash conversion profile, supported by
a strong development pipeline and potential for synergistic
M&A, Ocelot's directors believe that the Transaction represents
a meaningful value creation opportunity.
In connection with Ocelot's existing warrants, Ocelot announces
that with immediate effect the exercise price of the warrants is
temporarily reduced from US$11.50 to US$10.00 per whole ordinary
share until 26 March 2018.
In addition, prior to closing of the Transaction, Ocelot will
pursue commitments from warrant holders to an amendment to the
warrant instrument to shorten the subscription period of the
warrants (which currently expires on the third anniversary of
Ocelot's consummation of an acquisition (except in certain limited
circumstances)) so that it will expire shortly before consummation
of this Transaction.
Ocelot has received an opinion from Barclays, dated 28 February
2018, to the effect that (as of such date and based upon and
subject to the procedures followed by Barclays and the assumptions,
qualifications and limitations on the review undertaken and set out
therein, and other matters considered by Barclays in preparing its
opinion) Barclays is of the opinion that the consideration to be
paid by Ocelot pursuant to the Transaction is fair, from a
financial point of view, to Ocelot.
Forward-Looking Statements and Disclaimers
This announcement does not constitute or form part of any offer
or invitation to purchase, otherwise acquire, issue, subscribe for,
sell or otherwise dispose of any securities, nor any solicitation
of any offer to purchase, otherwise acquire, issue, subscribe for,
sell, or otherwise dispose of any securities.
The release, publication or distribution of this announcement in
certain jurisdictions may be restricted by law and therefore
persons in such jurisdictions into which this announcement is
released, published or distributed should inform themselves about
and observe such restrictions.
Barclays Bank PLC, acting through its Investment Bank
("Barclays"), which is authorised by the Prudential Regulation
Authority and regulated in the United Kingdom by the Financial
Conduct Authority and the Prudential Regulation Authority, is
acting exclusively for Ocelot and no one else in connection with
the Transaction and will not be responsible to anyone other than
Ocelot for providing the protections afforded to clients of
Barclays nor for providing advice in relation to the Transaction or
any other matter referred to in this announcement.
Certain statements in this announcement are forward-looking
statements which are based on Ocelot's and Ocean's expectations,
intentions and projections regarding its future performance,
anticipated events or trends and other matters that are not
historical facts, including expectations regarding (i) the
anticipated closing date of the transaction, (ii) the ability of
Ocelot to timely effect re-admission of Ocelot's ordinary shares on
the London Stock Exchange; (iii) the ability of Ocelot to meet the
eligibility criteria and effect a listing of its ordinary shares on
the London Stock Exchange, (iv) the ability of Ocelot to effect the
proposed amendment to the warrant subscription period; and (v) the
future operating and financial performance of Ocelot and Ocean.
These statements are not guarantees of future performance and are
subject to known and unknown risks, uncertainties and other factors
that could cause actual results to differ materially from those
expressed or implied by such forward-looking statements, including
(i) economic conditions, competition and other risks that may
affect Ocelot's future performance, (ii) the occurrence of any
event, change or other circumstances that could give rise to the
termination of the definitive agreement entered into among the
parties thereto in connection with the acquisition (the
"Transaction Agreement"); (iii) the risk that securities markets
will react negatively to the transaction or other actions by
Ocelot, Ocean and the combined company after completion of the
proposed transaction; (iv) the risk that the proposed transaction
disrupts current plans and operations as a result of the
announcement and consummation of the transactions described herein;
(v) the ability to recognise the anticipated benefits of the
combination of Ocean and Ocelot and of the combined company to take
advantage of strategic opportunities; (vi) costs related to the
proposed transaction; (vii) the limited liquidity and trading of
Ocelot's securities; (viii) changes in applicable laws or
regulations; (ix) the possibility that Ocelot or Ocean may be
adversely affected by other economic, business, and/or competitive
factors; and (x) other risks and uncertainties. Given these risks
and uncertainties, prospective investors are cautioned not to place
undue reliance on forward-looking statements. Forward-looking
statements speak only as of the date of such statements and, except
as required by applicable law, neither Ocelot nor Ocean undertake
any obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events
or otherwise. Nothing in this announcement constitutes or should be
construed as constituting a profit forecast.
This announcement contains inside information as defined in
article 7 of the Market Abuse Regulation (EU) No 596/2014.
About Ocean Outdoor
Ocean fills a unique position in the Out of Home (OOH)
advertising landscape, specialising only in digital, super-premium
and globally iconic screen locations.
Established in 2005, Ocean have pioneered Digital Out of Home
(DOOH) in the UK, an advertising channel that enhances the
traditional OOH market through merging the inherent strengths of
OOH and enhancing through location, audience, research, data and
unique technology such as vehicle detection and Look Out facial
detection technology.
Ocean operates the most iconic out-of-home sites and networks in
London, Birmingham, Manchester, Liverpool, Glasgow, Edinburgh,
Nottingham, Newcastle, Bristol and Leeds.
Ocean also holds exclusive external rights for the two most
premium urban shopping malls in Europe, Westfield London and
Westfield Stratford and the rights for the OOH advertising
contracts for Europe's largest municipal councils Birmingham and
Manchester City Councils.
Ocean has built a reputation for creativity and innovation in
DOOH through its annual creative competition. This competition has
led to a number of high profile campaigns and multiple awards for
winners of the competition, and produce technical innovation that
has become standard across the industry. Many winners have gone on
to win Cannes Advertising Lions.
About Ocelot Partners Limited
Ocelot Partners Limited (LSE: OLOT) is a publicly-listed
acquisition company that was listed on the London Stock Exchange in
March 2017 to undertake an acquisition of a target company. More
information on Ocelot Partners Limited is available at
http://www.ocelotpartnerslimited.com.
About Searchlight Capital Partners, L.P.
Searchlight Capital Partners is a global private investment firm
with offices in New York, London and Toronto. Searchlight seeks to
invest in business where their long-term capital and strategic
support accelerate value creation for all stakeholders. For more
information, please visit www.searchlightcap.com.
For enquiries in relation to this announcement, contact:
Conrad Harrington / Cassandra Bujarski / Devin Broda
Sard Verbinnen & Co
+44 (0)20 3178 8914 / +1 212 687 8080
This information is provided by RNS
The company news service from the London Stock Exchange
END
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