As it prepares to get out of newspapers, APN News & Media will move further into digital and leapfrog a giant competitor with the buyout of outdoor site owner Adshel and purchase of digital pure-play Conversant Media.
The company called a halt on stockmarket trading ahead of this morning's announcement, which includes a $273 million equity raising.
APN will pay $268.4 million to buy Clear Channel out of the joint venture the two have shared since 1997 when they were partners in Australian Radio Network. The $11.6 million it is paying for Conversant Media is separate to this and is to be funded through existing debt facilities. APN says Adshel needs to invest in digital and the deal will make it easier for it to invest, pursue new business opportunities and retain contracts.
Since the end of 2013 it has bought Clear out of ARN, bought the remainder of Hong Kong Outdoor's assets, acquired radio station 96FM, demerged NZME and sold its Australian regional newspapers (subject to ACCC approval), eliminating its 61 per cent dependence on publishing revenue, and moved to a 43/57 split between outdoor and radio. It currently retains almost 15 per cent of New Zealand publisher NZME.
It will also control (at today's figures) a 55 per cent share of Australian out of home digital revenue, leapfrogging Oohmedia! - owned by Martin Sorrell's giant WPP - which currently takes 45 per cent.
While their contribution to newsmedia diversity in Australasia will be missed, APN - which will presumably want to change its name and reconsider its membership of NewsMediaWorks - is focussing on an exciting segment of the advertising spectrum. Adshel claims to reach 92 per cent of Australia 68 times a fortnight in a bright, highly visual format. A couple of weeks ago it announced that it had switched on another 110 digital screens, bringing its total screens at roadside and NSW rail sites in Australia to 535- many of them 86" HD performers - with another 130 in New Zealand. It has about 22,000 static and digital panel sites altogether.
The technology is capable of presenting changing messages to passers-by, and can be expanded to recognise members of the public from their mobile phone data and pitch specifically to them. Conversant Media - although apparently not connected with the US-headquartered Big Data company of the same name - could be a useful partner. Founded in 2007 by Zac and Zoltan Zavos, it owns sports site The Roar, Techly and Lost at E Minor, and sells local advertising for others including Bored Panda, Business Inc and IFL Science.
Forget newspapers, this is about a "unique advertiser proposition with an integrated radio/outdoor/mobile/video platform" and greater ability to target advertisers with fully integrated campaigns.
The architect of all this, chief executive and managing director Ciaran Davis says the demands of advertisers are changing rapidly, and the deals will make APN's offering to advertisers more effective.
Eligible shareholders are being invited to subscribe for five new shares for every 13 they already hold, with about 82.1 million new APN shares to be issued. An institutional offer is also being made today and tomorrow, with APN shares in a trading halt while this and a shortfall bookbuild are undertaken. The retail entitlement offer is open from November 2-17. When it's over, a radically new, effectively print-free APN News & Media will have emerged. But as the deals "accelerate APN's growth strategy", it promises to be only the beginning of the story.
With or without print, it may be the kind of move other media companies should be pursuing.
Peter Coleman