Lamar Sponsors $300 Million SPAC

Lamar Advertising filed an S-1 to raise $300-345 million via a special purpose acquisition company (“SPAC”) named Lamar Partnering Corporation (“LPC”). Lamar will own approximately 20% of the LPC.  LPC will be managed by members of Lamar’s management team including Ross Reilly, Lamar’s VP of Mergers and Acquisitions who will serve as Chief Executive Officer.  Ross is nephew of Lamar CEO Sean Reilly and the son of Lamar President and Board Chairman Kevin P Reilly Jr. The LPC’s board includes:

  • Lamar CEO Sean Reilly
  • Lamar CFO Jay Johnson,
  • Lamar VP of Mergers and Acquisitions Ross Reilly
  • Lamar Corporate Controller Joe O’Brien
  • Lamar EVP Business Development Buster Kantrow
  • Lamar VP Digital Growth Ian Dallimore
  • JFH Consulting’s Juliana Hill
  • Seaport Capital founder Bill Luby
  • DPAA CEO Barry Frey

The S-1 offering says the LPC ” will not compete with Lamar’s REIT-focused acquisition strategy.”  Target sectors for an acquisition are:

  • Non REIT Transit, Airport and other Digital Media/Digital Addressable Screen Networks.
  • Advertising Technology
  • International Out of Home.
  • Distributed Energy and Wireless Communications Infrastructure.

Insider’s take: 

Raising SPAC money is the easy part in today’s market.  The hard part is finding a suitable acquisition and a reasonable price.  There are lots of SPACs in the market chasing deals.  If LPC never finds an acquisition it will return the money and unwind.  LPC will not compete with Lamar’s REIT strategy so US out of home plant acquisitions are off the table.  Not surprised that the SPAC is looking at wireless communications because Sean and Kevin Reilly are shareholders in a Louisiana telcom company.  Barry Frey and Ian Dallimore are on the LPC board so a placed based digital screen deal or an ad tech deal are possibilities.  Insider questions the wisdom of a US based out of home company pushing into international out of home.  No synergies and remote management issues.  How’s it working for Clear Channel Outdoor?

Here’s what Insider hears.

Max Drachman, Kalil and Company

It was exciting news to hear about the Reilly family’s SPAC.  They are incredibly smart and innovative, so we are eager to see announcements on their capital deployment.  I’ve worked with Ross over the last year or so, and his attention to detail and broad scope of cross-sector knowledge makes him the perfect driver for a media/tech investment vehicle.  We see Outdoor and digital infrastructure becoming more and more intertwined in the near future, and that overlap will continue to strengthen.

Jim Johnsen, Johnsen Fretty

Anyone else remember that scene in Madmen when Don Draper rolls into the office, points to the new large IBM mainframe in the conference room and says something like “What the heck is this?”  I think we are at that moment.  The Reillys are some of the most forward thinking executives in the out of home space.  One could argue that they got to the consolidation phase before anyone else did (at least at scale), they embraced vinyl nationwide as soon as it was cost effective and they aggressively rolled out digital faster than any other player out there.  It’s not surprising that they are now about to execute on the next paradigm shift in the industry.  We would advise your readers to keep a very close eye on the Lamar spac…we believe it will be a key leading indicator of exciting things to come in this industry as the medium transforms into something very different.

An out of home lender

I think this will allow Lamar to acquire and/or build vertically integrated business lines free from the REIT structure, especially business lines that employ technology in the out of home industry. REIT’s are very restrictive and obviously real estate focused. The capital markets clearly love Lamar and its management team.

Lamar closed the day up 0.6% on a day when clear Channel Outdoor was up 3.1%, OUTFRONT was down 0.6% and the S&P 500 was up 0.1%.

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