GO
Loading...

CBS Outdoor IPO values company at about $3.36 billion

CBS Outdoor Americas said it priced its initial public offering at $28 per share, valuing the outdoor advertising company at about $3.36 billion.

CBS Outdoor, part of media conglomerate CBS, will raise about $560 million from the offering of 20 million shares at that price, which is at the high-end of its planned $26 and $28 range.

The company's shares will start trading on Friday on the New York Stock Exchange under the symbol "CBSO."

Read More Top 10 worst-performing 2014 IPOs on first day of trading

CBS, which will reduce its stake to 83 percent after the offering, plans to convert CBS Outdoor into a real estate investment trust (REIT).

Signage is displayed on the CBS Corp. Television City building in Los Angeles, California, U.S.
Jonathan Alcorn | Bloomberg | Getty Images
Signage is displayed on the CBS Corp. Television City building in Los Angeles, California, U.S.

As a REIT, it can avoid paying corporate-level income taxes if it distributes at least 90 percent of its taxable income to shareholders in the form of dividends.

CBS Outdoor had about 330,000 displays in the United States and about 26,200 displays across Canada and Latin America as of Dec. 31. The company has displays in some of the most heavily trafficked locations such as the Bay Bridge in San Francisco, Sunset Boulevard in Los Angeles and Grand Central Station and Times Square in New York City.

Read More Is the IPO market in a bubble? What to look for...

The New York-based company counts Apple, McDonald's, Sony, and Verizon Communications among its major customers.

Outdoor advertising companies have been converting their traditional billboards to digital billboards as it allows them to run multiple ads on each display. As of Dec. 31, 2013, CBS Outdoor had 373 digital billboard displays in the United States.

CBS has moved to diversify its revenue away from advertising, in part by selling shows to subscription video on-demand services such as Netflix and Hulu Plus. "We've changed from a company that was 70 percent dependent on advertising to a company that's down to close to only 50 percent dependent on advertising," Chief Executive Officer Leslie Moonves said at a Morgan Stanley conference earlier this month.

Read MoreJim Cramer: This trend really worries me

CBS Outdoor, which competes with Clear Channel Outdoor Holdings and Lamar Advertising, said net income rose 27 percent to $143.5 million on revenue of $1.29 billion for the year ended 2013.

Goldman Sachs, Bank of America/Merrill Lynch, JPMorgan Chase, and Morgan Stanley are the lead underwriters of the offering.

By Reuters

Symbol
Price
 
Change
%Change
CBS
---
AAPL
---
MCD
---
VZ
---
NFLX
---
CCO
---
LAMR
---
BAC
---
GS
---
JPM
---
MS
---

Featured