Public outdoor values remained stable during the fourth quarter of 2015. The three public outdoor companies have an enterprise value of 3.9 times revenue and 12.3 times cashflow (EBIDTA) at December 2015. Lamar’s multiple increased slightly during the quarter, Outfront’s multiple was stable and Clear Channel’s multiple decreased.
Lamar had a good year with a 12% stock price increase versus during 2015 versus a 1% decline in the S&P 500 due to increasing revenue and healthy margins. Clear Channel’s stock fell 49% during 2015 versus a 1% decline in the S&P 500 due to anemic revenue growth and high leverage.
| Enterprise Value as a Revenue Multiple | Mar-15 | Jun-15 | Sep-15 | Dec-15 |
| Clear Channel | 2.83 | 2.83 | 2.83 | 2.39 |
| Lamar | 5.84 | 5.79 | 5.27 | 5.80 |
| Outfront | 4.65 | 4.17 | 3.49 | 3.44 |
| Average Revenue Multiple | 4.44 | 4.26 | 3.86 | 3.88 |
| Enterprise Value as a Cashflow Multiple | Mar-15 | Jun-15 | Sep-15 | Dec-15 |
| Clear Channel | 11.70 | 11.68 | 10.48 | 9.73 |
| Lamar | 14.07 | 13.79 | 12.57 | 13.86 |
| Outfront | 16.94 | 15.45 | 13.15 | 13.24 |
| Average Cashflow Multiple | 14.24 | 13.64 | 12.07 | 12.28 |
| 52 week change in stock price | Dec-15 | |||
| Clear Channel | -49% | |||
| Lamar | 12% | |||
| Outront | -19% | |||
| Dec-15 | ||||
| S&P 500 Stock Market | -1% |
The rule of thumb for private market transactions is 4-6 times actual gross revenue and 8-10 time actual casfhflow (EBIDTA).
I have observed larger regional groups who are asking 8-9 times actual gross revenue and 15-20 times cashflow. Transactions at that price will get in trouble in the next recession if they are financed with debt. Noone is smart enough to avoid the consequences of overpaying at the top of the market.
The market for very small transactions is more reasonable with sales prices of 4-6 times gross revenue and 5-10 times cashflow.
Easements are selling for 6-10 times cashflow.
