QMS board set to accept Quadrant’s $500m-plus bid

QMS board set to accept Quadrant’s $500m-plus bid


Street Talk

Quadrant Private Equity is ready to jump back into out-of-home advertising.

Four years after selling out of what was APN Outdoor – and five years after listing it on the ASX– Street Talk can reveal Quadrant has a board-recommended deal to buy digital signage and sports advertising specialist QMS Media.

via apinews.org

Advisers for QMS Media and Quadrant Private Equity were seeking to ink an agreed deal over the weekend.  Daniel O’Brien

Lender sources told Street Talk on Sunday the private equity firm would acquire QMS in full and had offered more than $1.10 a share for the privilege, which is more than where the company’s shares have traded for about 18-months.

The deal would value QMS at north of $500 million including debt, if successful, and represent prolific dealmaker Quadrant’s first ever direct public-to-private transaction.[One of Quadrant’s portfolio companies is in the process of mopping up a listed rival.] 

Both sides were working to finalise the paperwork over the weekend. The deal, to be endorsed by QMS’ board and done via a scheme of arrangement, is expected to be announced as early as Monday.

It comes less than one week after Street Talk revealed QMS was in the crosshairs of a suitor keen to strike an all-of-company deal, and soon after QMS’ shares went into a trading halt.This column first reported on Fridaythat Quadrant was behind the takeover approach.

Investment banks Jefferies and Nomura are working for Quadrant, along with law firm Gilbert + Tobin, while CLSA is tending to QMS.

QMS management, headed by CEO and major shareholder Barclay Nettlefold, is expected to remain at the company under Quadrant’s ownership. It is not known whether Nettlefold is rolling is 15 per cent-odd stake into the bid vehicle, although Quadrant would likely demand he retains significant skin in the game. It could also help thwart off any rival suitors.

Quadrant is expected to fund the deal with a mixture of equity and debt. Advisers Nomura and Jefferies will lend into the deal, while Quadrant is fond of global credit manager HPS. HPS has helped refinanceQuadrant’s Experience Australia Groupandgyms business Fitness and Lifestyle Group in recent years.

Quadrant’s investors are likely to have heard the pitch before. When the buyout firm owned APN Outdoor earlier this decade, its thesis was all about the digitisation of outdoor advertising. It meant billboards could have multiple advertisers, significantly increasing the yield per site.

Should the deal pass muster with QMS shareholders, it would end the company’s short life as listed entity. QMS raised $90 million to list on the ASX in mid-2015, not long after bigger players APN Outdoor and oOh!media had secured initial public offerings of their own. Interestingly,APN Outdoor was snapped up by French company JCDecaux last year, while oOh! bought the next biggest player AdShel.

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Sarah Thompsonhas co-edited the Street Talk column since 2009, specialising in private equity, investment banking, mergers & acquisitions and equity capital markets stories. Prior to that she spent ten years in London as a markets and M&A reporter at Bloomberg News and Dow Jones Newswires.Email Sarah at[email protected]

Sarah Thompson

Anthony Macdonaldco-edits the Street Talk column, specialising in private equity, investment banking, mergers & acquisitions and equity capital markets. He has 10 years’ experience as a business journalist and previously worked at professional services firm PwC, auditing and advising financial services companies.Connect with Anthony onTwitter.Email Anthony at[email protected]

Anthony Macdonald

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