CBS Corp. is flying down to Rio to expand its fast-growing outdoor advertising biz.
The Eye has forked over $110 million in cash to buy Intl. Outdoor Advertising Group, which controls 17,000 billboards and other outdoor ad properties in Argentina, Brazil, Chile and Uruguay. Deal marks CBS’ first foothold in South America.
Intl. Outdoor Advertising “is a great complement to our outdoor billboard businesses in Mexico and Spain,” CBS boss Leslie Moonves said in announcing the acquisition. “What’s more, it gives us yet another opportunity to deepen CBS’ international footprint into a new continent.”
CBS Outdoor is the brightest spot in the Eye’s portfolio these days, and Moonves has been promising to expand the company’s holdings, particularly in foreign markets. Moonves has also vowed to put CBS’ significant cash reserves to good work this year. At the end of last year, CBS had $1.3 billion in cash on its balance sheet.
There’s been speculation of late that CBS may be in the market for a cable outlet to help offset the company’s heavy reliance on purely ad-driven radio and TV stations. But the Intl. Outdoor Advertising purchase comes as no surprise, either. Moonves has made it clear in recent remarks to investors that he’s enamored of the low-cost, high-margin outdoor biz.
In a recent research note, Lehman Brothers analyst Anthony DiClemente observed that CBS Outdoor has strong growth prospects and has been boosted by CBS’ ability to cross-sell outdoor space with its TV and radio stations. CBS has also been raking in new bucks from its investments in digital billboards that can generate significantly more revenue than old-fashioned billboards at higher rates.
CBS Outdoor ranks as North America’s largest out-of-home ad seller, with more than 100,000 traditional billboards in the U.S. alone.
Internationally, the Eye’s latest acquisition complements its growing outdoor biz in Europe and Asia, which includes a toehold in the potentially lucrative Chinese market with a recent pact to sell ad space on 5,700 buses in Beijing.
“IOA will greatly increase the size of the business by adding not only scale but opportunities for leveraging existing business within the group,” said Clive Punter, prexy-chief exec of CBS Outdoor Intl.
CBS shares closed up 58¢ on Thursday to $21.97.