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Lamar Acquires AdSource Outdoor Assets Through UPREIT Transaction
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Key Takeaways
Lamar acquired more than 230 AdSource billboard faces across Louisiana, including 30 digital displays.
AdSource owners received Lamar LP units that track the value of Lamar's Class A common stock.
Lamar's UPREIT structure enables tax-deferred acquisitions by issuing partnership units to billboard owners.
Lamar Advertising Company (LAMR - Free Report) has acquired the assets of AdSource Outdoor Advertising through the billboard industry’s second-ever UPREIT transaction. The acquisition, which closed on Aug. 12, had previously been disclosed during Lamar’s recent earnings call.
Through the acquisition, Lamar is adding more than 230 billboard faces across Louisiana to its portfolio. The newly acquired assets include 30 digital displays, further strengthening the company’s outdoor advertising presence in the state.
AdSource was launched in Lake Charles, LA, in 2003. Over the years, the company expanded its operations and built a broader network of billboard assets throughout Louisiana.
As part of the transaction, AdSource contributed its assets to Lamar Advertising Limited Partnership (“Lamar LP”), the operating partnership subsidiary that holds Lamar’s assets. In return, AdSource’s owners received common units of Lamar LP. These units are structured to track the value of Lamar’s Class A common stock. Holders receive cash distributions on each common unit equal to the per-share dividend paid on Lamar’s common stock. The units may also be converted into cash or shares of Lamar Class A common stock.
The transaction was made possible by Lamar’s UPREIT organization or Umbrella Partnership Real Estate Investment Trust. This allows the company to issue Lamar LP partnership units to billboard owners as part of acquisitions on a tax-deferred basis.
Conclusion
The AdSource acquisition is expected to benefit Lamar by expanding its billboard network in Louisiana. The UPREIT structure also provides a tax-efficient acquisition tool that could help Lamar pursue similar transactions, deepen its market presence and support long-term revenue growth.
In the past three months, shares of this Zacks Rank #3 (Hold) company have gained 7.7% compared with the industry's growth of 2.9%.
View the Zacks #1 Rank List
Image: Bigstock
Lamar Acquires AdSource Outdoor Assets Through UPREIT Transaction
Key Takeaways
Lamar Advertising Company (LAMR - Free Report) has acquired the assets of AdSource Outdoor Advertising through the billboard industry’s second-ever UPREIT transaction. The acquisition, which closed on Aug. 12, had previously been disclosed during Lamar’s recent earnings call.
Through the acquisition, Lamar is adding more than 230 billboard faces across Louisiana to its portfolio. The newly acquired assets include 30 digital displays, further strengthening the company’s outdoor advertising presence in the state.
AdSource was launched in Lake Charles, LA, in 2003. Over the years, the company expanded its operations and built a broader network of billboard assets throughout Louisiana.
As part of the transaction, AdSource contributed its assets to Lamar Advertising Limited Partnership (“Lamar LP”), the operating partnership subsidiary that holds Lamar’s assets. In return, AdSource’s owners received common units of Lamar LP. These units are structured to track the value of Lamar’s Class A common stock. Holders receive cash distributions on each common unit equal to the per-share dividend paid on Lamar’s common stock. The units may also be converted into cash or shares of Lamar Class A common stock.
The transaction was made possible by Lamar’s UPREIT organization or Umbrella Partnership Real Estate Investment Trust. This allows the company to issue Lamar LP partnership units to billboard owners as part of acquisitions on a tax-deferred basis.
Conclusion
The AdSource acquisition is expected to benefit Lamar by expanding its billboard network in Louisiana. The UPREIT structure also provides a tax-efficient acquisition tool that could help Lamar pursue similar transactions, deepen its market presence and support long-term revenue growth.
In the past three months, shares of this Zacks Rank #3 (Hold) company have gained 7.7% compared with the industry's growth of 2.9%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the broader REIT sector are American Tower (AMT - Free Report) and Cousins Properties (CUZ - Free Report) , each carrying a Zacks Rank of #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for AMT’s 2026 FFO per share is pegged at $11.00, which indicates year-over-year growth of 2.23%.
The Zacks Consensus Estimate for CUZ’s full-year FFO per share is pinned at $2.96, which suggests an increase of 4.23% from the year-ago period.
Note: Anything related to earnings presented in this write-up represents FFO, a widely used metric to gauge the performance of REITs.