LDC backs £35m buyout of advertising group

PRIVATE equity firm LDC has backed a £35m buyout of national banner advertising group Ocean Outdoor from its early-stage investors led by Smedvig Capital.

LDC’s investment secures Ocean Outdoor’s independence and provides the company with the resource to continue to develop its leading position in the iconic, large-format digital and banner outdoor advertising market.

Ocean operates 28 sites in the UK, which include the UK’s top two digital locations – Two Towers West on the Hammersmith flyover and Eat Street at Westfield Shopping Centre, both in West London. It also has a high profile location outside Snow Hill in Birmingham city centre.

The outdoor advertising market in the UK is worth close to £1bn in annual revenues and Ocean operates in the fastest growing segment: digital OOH advertising. This has been growing at around 30% annually – on current trends it is expanding at three times the rate of the overall advertising market – and Ocean’s recent growth rates have been ahead of the sector average.

Daniel Sasaki, of LDC, said: “The Ocean Team presented a compelling story of what has been achieved to date, together with their exciting plans for the future.  This includes further expansion of the company’s premium iconic locations, pioneering new digital technology and engaging with a wider client base as digital out of home converges with mobile audiences.

“We are proud to be partnering with such a strong team and prestigious brand. This is LDC’s second media deal in the past 12 months, with over £154m now invested as part of our £200m commitment to the TMT sector.”

Ocean’s sites are strategically positioned where there is a predominance of AB and ABC1 socio demographic groups – particularly attractive to premium brand advertisers – and very high footfall.

The premium nature of Ocean’s iconic sites has attracted a long list of global brands, including Apple, Chanel, Burberry and BMW. Ocean’s strategy has been to target specific advertising categories and key clients within these categories, many of which would not be expected to be seen on Out of Home advertising sites.

LDC’s backing will allow Ocean to further expand in London, its strongest market, strengthen its coverage across the UK’s top ten cities and accelerate its focus on improving the interactivity of its digital sites with smart phones to improve consumer experience and revenues.

Tom Goddard, Ocean’s Chairman, said: “Securing the backing of a partner of the calibre of LDC is a strong endorsement of the Ocean brand and management team. They will be remaining with the business and guiding Ocean in its continuing role as the leader of this exciting market sector. I believe this news, which helps secure Ocean’s independence, will be welcomed across the whole media industry.”