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Lehman, Sachs, ICICI to pick 20% in OOH ad co

Private equity is ramping up presence in India’s out-of-home (OOH) advertising play. ICICI Ventures, Lehman and Goldman Sachs have lined up to pick up around 15-20% stake in Bangalore-based outdoor advertising firm Serve & Volley (S&V) for Rs 250 crore.

Sources said Serve & Volley, with key assets like Delhi Metro, Kolkata Metro and Bangalore Municipal Corporation, plans to dilute 15-20% to raise Rs 300 crore.

The 11-year-old company vies with sector leaders like Clear Channel, Laqshya and JCDecaux for a pie in the Rs 1,800-crore business, growing robustly at 10-15% in recent times. When contacted, S&V’s COO J Vishwanath declined to comment. Sources said advanced discussions were on with at least three funds for raising Rs 300 crore.

Outdoor media firms have recently been on the radar of PEs and VC funds. Emergence of new airports, roads, highways, malls and organised retail have created the need for outdoor advertising like billboards, hoardings, mobile vans, bus shelters and promotional activities at the point of purchase and television screens. This has made outdoor media companies attractive for foreign and Indian funds.

Last week,Warburg Pincus completed a Rs 276-crore investment into Laqshya while another global PE giant 3i Capital, an original investor behind China’s blockbuster out-of-home advertising asset Focus Media, is building the same in the domestic market on its own.

S&V, promoted by Nitesh Shetty, has been accelerating its pan-India presence through infrastructure-related outdoor assets. This rapidly expanding advertising segment remains highly fragmented with over 2,000 players, but with just 10 of them having a national presence.

S&V, which happens to be Mr Shetty’s original business, is managed independently and only has an arm’s-length ties in real estate, infrastructure and construction. Mr Shetty has been sewing up PE deals for his businesses with Citigroup and Och-Ziff.

Source: Economic Times

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