JC Decaux’s acquisition of Bravo Outdoor Advertising this week now makes it the single largest player in the Irish market outdoor market and the deal will almost certainly be scrutinized by the Competition Authority according to industry sources.
The French-owned company acquired rival Bravo for an undisclosed sum during the week and has already taken day-to-day control of the business. While James Barry, Bravo’s CEO will remain on with the company until a successful handover is completed, financial controller and fellow shareholder Caroline O’Connor has already left the company. It is also understood that there will be no job losses at Bravo for the foreseeable future although if JC Decaux fails to win estimated €40m CIE outdoor business, job losses are almost inevitable.
It is also understood that all the main players in the outdoor sector including CBS Outdoor, JC Decaux and Clear Channel will be tendering for the CIE business. With the incumbent Bravo Outdoor were going to throw their hats into the ring for the contract. With Bravo now tied up with JC Decaux, industry sources suggest that the combined businesses will be front-runners to win it.
CIE’s outdoor business is the largest single outdoor contract in the country and one of the most keenly sought-after. Bravo Outdoor has been handling the business for the past three years. Bravo Outdoor was formed by its Irish management, headed up by James Barry, following the decision by Titan Outdoor to pull out of the Irish market in 2010. Since then the company has worked very closely with CIE management in developing and growing the business although an option of extending its contract by another year appears not to have been invoked.
It is expected that CIE will announce winner of the tender process in July. The contract duration is not actually specified but according to the tender documents, it is likely to be three years with an option to extend for an additional two years, or, five years with an option to extend for an additional 2 years. However the total duration of the contract will not exceed seven years according to the documents.
The length of the contract is likely to be linked to the amount of investment needed to upgrade some of CIE’s existing advertising infrastructure. This is expected to be in the region of €3m according to some sources. According to the tender documents “the successful tenderer will be required to make a capital investment in the advertising plant to update the advertising portfolio which may include conversion to digital and more modern formats.” Any company making this level of investment will almost certainly request that the contract runs to its maximum seven year term so that it can make a return on its investment.
According to Joanne Grant, managing director of JC Decaux Ireland, “we are very excited to be extending our inventory range as we see these new products as complementing and enhancing the JCDecaux portfolio. Ultimately this extended product offering will benefit our clients. Out-of-home media is all about being able to communicate with a mobile target audience as they go about their day. We can now offer clients the ability to reach their consumers across the full range of out-of-home environments, from large format roadside to transport formats to retail and digital.”
