Chancellor Media continued its shopping spree Monday, agreeing to buy privately-held Whiteco Outdoor Advertising for $930 million.
The cash purchase, which puts Chancellor in the top five billboard advertisers in the country, follows last week's $4.1 billion deal to buy radio giant Capstar.
Chancellor shares fell 1/8 to 41 1/8 in early trading Monday.
The $930 million cash deal represents a multiple of about 12.4 times projected 1999 billboard cash flow and will be accretive to Chancellor's 1999 after-tax cash flow by about 10 cents per share, the company said in a press release.
The Dallas-based company said Whiteco's operations overlap Chancellor's radio and TV stations in 54 markets.
Chancellor's move comes alongside efforts by CBS and other media companies to offer advertisers multi-platform deals spanning radio, TV, and outdoor.
"With the acquisition of the Whiteco Outdoor assets we have completed the foundation of Chancellor's multimedia national platform," Chancellor president and CEO Jeffrey A. Marcus said in a statement. "Our radio group is the largest in the nation, while our outdoor division is ranked among the top five in the industry. Add to that a meaningful presence in television and it is clear that in a very short time we have created a powerful platform."
After the transaction Chancellor's outdoor group will own and operate more than 35,000 outdoor advertising display faces in 37 states. It will have 1999 pro forma net revenue of about $245 million.
Last week's radio mega-merger with Chancellor and Capstar combined two units of private buyout firm Hicks, Muse, Tate & Furst. Chancellor bought LIN Television from Hicks, Muse in July for $1.6 billion.
By Steve Gelsi, CBS MarketWatch