VGI MACO Out-of-Home Media Giants announces Partnership to expand business together

Stocks and Financial Services Press Releases Friday May 16, 2014 13:56
Bangkok--16 May--ASIA PLUS

Mr. Kavin Kanjanapas, Chariman of the Executive Committee of VGI Global Media Public Company Limited ("VGI") discloses that on May 12, 2014, the company acquired shares of Master Ad Public Company Limited ("MACO"), key player of Out-of-Home media which has advertising media located in central business district of Bangkok, residential community and strategic communication route. VGI acquired a total of 24.43% of total issued and paid-up shares of MACO at the price of 9 Baht per share, totaling to value of 661,500,000 baht from the major shareholders of MACO.

Mr. Noppadol Tansalarak, Chairman of the Executive Committee of MACO, said that "VGI is an excellent out-of-home media partner. VGI not only has good location and attractive design for its advertising media but also has strong executive, and employees. Moreover, VGI also has good strategy and high quality management system. Both VGI and MACO have seen each other’s development in its respective out-of-home media sub-sector for a long time. I'm delighted to see further development beyond current success of both companies in the future. In addition, existing major shareholders will still hold substantial shareholding in Maco and existing management will continue managing Maco".

With over 26 years of operation, MACO is one of the leaders in out-of-home media industry especially in the Outdoor media category. MACO's key revenues are derived from billboard advertising service, advertising production service and other services that enhance MACO to provide a total solution for its clients. Currently, MACO is the owner of 1) 170 billboards installed on the edge of strategic communication route, 2) street furniture including 188 trivision panels installed on BTS pillars, 1 Siam Square Media ,and 366 media panels under flyover in Bangkok (consisting of 177 media panels under 1st phase and 249 media panels under 2nd phase), and 3) transit media including 80 media panels on walkways of BTS station, 124 media panels installed at toll boots of Expressway Authority of Thailand, and 7 media panels in Mochit 2 Bus Terminal.

Beside excellent media location, MACO also has excellent staffs to seek for location that is attractive to consumers and high quality team to procure and install large billboards which their structure are complied with engineering standard. MACO's subsidiaries have capability and technology to produce billboard structure, and large format printing media. MACO group also has innovative advertising medias, which are proved by several awards such as Coke bottle 3D Mapping on CPN building which awarded Media Lions level 2 in Cannes Lion 2013 in France. MACO also received Asia's 200 Best Under Billion from Forbes magazine and Company Performance Awards from SET Awards 2013 for two consecutive years.

Mr. Marut, Arthakaivalvatee, Chief Executive Officer of VGI, said that VGI believes that both VGI and MACO will achieve synergy from this partnership. Both companies will plan new strategy to build more value for both company, create marketing campaign and sales advertising media together. This partnership will give more media alternatives which will help answer various needs of its clients, and better penetrate target customer which will result in higher revenue for VGI and MACO in the long run. This investment is the important step for VGI to expand its investment from the existing Transit Media and In-store Media which main media Indoor to Outdoor Media, the market in which MACO is a leader. VGI is confident that this transaction will help and bring both companies to the leader position of Out-of-

Home Media both in Thailand and in ASEAN countries.

According to AC Nielson, total Out-of Home market size was estimated to be 10,287 million Baht in 2013 comprising of 3 categories; 1) Outdoor Media of 4,167 million Baht 2) Mass Transit System of 3,528 million Baht ,and 3) Department Stores of 2,486 million Baht. Thus, Outdoor Media is one-third of total Out-of Home market size.

Ms. Suparanan Tanviruch, Chief Financial Officer of VGI, additionally informs that MACO’s financial performance has robust growth over the past 3 years with 7.5% CAGR in revenue. In 2013, its revenue is 745.58 million Baht. Furthermore, net profit in the last 3 years grows 16.6% per year in average with net profit of 173.8 million Baht in 2013. Net profit margin is 23.3% in 2013. ROE in last 3 years is 20%-27%. In the last 6 years, dividend yield is consistently high and paid 0.50 Baht per share under 2013 fiscal year or 5.56% of dividend yield at purchasing price 9.0 Baht per share. VGI will use operating cash flow and financing from financial institutions as source of fund for this transaction.


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