VGI acquires 24.4% stake in Master Ad out-of-home media company
May 13, 2014 00:00 By The Nation
VGI Global Media, a major out-of-home media company, has acquired 24.4 per cent of Master Ad (MACO), another key player in out-of-home media, for Bt661.5 million.
According to VGI’s filing to the Stock Exchange of Thailand yesterday, its board on Friday approved the purchase of shares from Master Ad’s major stockholders as part of the company’s strategy to expand its out-of-home media network. The purchase was made through a big-lot trade yesterday.
Kavin Kanjanapas, executive chairman of VGI, said MACO had advertising media in the central business district of Bangkok, residential communities and strategic communication routes.
Noppadol Tansalarak, executive chairman of Master Ad, said VGI was an excellent out-of-home media partner.
“VGI not only has good locations and attractive designs for its advertising media but also has strong executives and employees. VGI also has a good strategy and high-quality management system,” he said.
Both VGI and Master Ad have seen each other’s development in the out-of-home media sub-sector for a long time, he said. The existing major shareholders will still hold substantial positions in Master Ad and existing management will continue managing Master Ad.
With more than 26 years of operation, Master Ad is one of the leaders in the industry, especially in the outdoor-media category. Its key revenue sources are billboard advertising, advertising production and other services.
Master Ad owns 170 billboards installed on the edges of strategic communication routes, street furniture including 188 tri-vision panels installed on Skytrain pillars, 1 Siam Square Media and 366 media panels under flyovers in Bangkok, and transit media including 80 media panels on walkways of Skytrain stations, 124 media panels installed at toll booths of the Expressway Authority of Thailand, and seven media panels in the Mo Chit 2 Bus Terminal.
Marut Arthakaivalvatee, chief executive of VGI, said it believed that both VGI and Master Ad will achieve synergy from this partnership. They will plan a new strategy to build more value for both companies and create marketing campaigns and advertising media together.
This partnership will increase media alternatives, which will help answer the various needs of clients, and better penetrate target customers, which will result in higher revenue for the partners in the long run, Marut said.
This investment is an important step for VGI to expand from existing transit and in-store media to outdoor media, the market in which Master Ad is a leader. VGI says it is confident that this transaction will help bring both companies to the leadership of out-of-home media both in Thailand and in Asean countries. According to ACNielsen, the out-of-home market was estimated at Bt10.29 billion last year, comprising three categories – outdoor media with Bt4.17 billion, mass transit with Bt3.53 billion and department stores with Bt2.49 billion. Outdoor media comprise one-third of the out-of home market.
Suparanan Tanviruch, chief financial officer of VGI, said Master Ad’s financial performance had shown robust growth over the past three years with 7.5-per-cent compounded annual growth in revenue.