Negotiations for the sale of Churchill Media, the third-largest player on the outdoor advertising market, had a surprise ending this week: the company was not bought by the market leader - Euromedia, as initially speculated, but by the market's fourth-largest player, Efect Media.
Efect Media, which is also backed by private financing, bought the main stake from Swedish investment fund Oresa Ventures, the only shareholder of Churchill Media until this week. Oresa Ventures is still a shareholder, but its participation has been significantly reduced.
Efect Media and Churchill Media will continue to operate as two distinct legal entities, but will be run by a sole management team and will be part of a group to be called Churchill-Efect. According to Efect Media officials, the two companies will outrun Exclusiv Media (number two on the market) next year.
"We bought Churchill Media because our activities match and because we strive to create the second-leading player on the Romanian outdoor advertising market. This player should get close to the leading position and become interesting to the strategic investors," Cristian Toanchina, general manager and stockholder of Efect Media said.
The acquisition of Churchill Media by Efect Media can be deemed as a surprise because even the market leader (Euromedia) was interested in the transaction. One of the world's largest investment funds, US-based Advent International, holds the main stake in Euromedia. According to market estimates, Euromedia held 50% of the market in terms of sales last year, followed by Exclusiv Media, with some 25%.
Exclusiv Media is the only company owned by a strategic investor, the media group NewsCorp, controlled by tycoon Rupert Murdoch. In 2002, Churchill Media had about 10% market share, while Efect Media has some 5-7 percent.
"According to our calculations, Efect Media is the fourth-largest market player in terms of turnover. Together with Churchill Media, which ranks third, we shall be very close to the second spot, and we are even planning to corner the leader in 2004," Toanchina says.
But how will a group that holds 20% of the market get near a company (Euromedia) that has a 50% share?
"We are mulling several development strategies, including more acquisitions, for instance. Moreover, the new group will have a much more competitive offer, due to the synergies between the two companies," says Dio Boaca, managing director of Churchill Media and sales manager of the newly-established group.
The Romanian outdoor advertising market did not do very well between 2000-2002, when its value froze at $11-12 million.
Pentru alte știri, analize, articole și informații din business în timp real urmărește Ziarul Financiar pe WhatsApp Channels
