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BATON ROUGE - Lamar Advertising Company (NASDAQ:LAMR), a $12.36 billion outdoor advertising giant with a robust 5% dividend yield, has acquired Verde Outdoor in what the company describes as the first-ever UPREIT transaction in the billboard industry, according to a press release statement. According to InvestingPro analysis, the company maintains a "GOOD" overall financial health score, suggesting strong operational fundamentals.
The acquisition, which closed on July 2, adds more than 1,500 billboard faces, including 80 digital displays, across 10 states to Lamar’s portfolio. The deal expands Lamar’s presence in key markets throughout the Midwest, Southeast and Mid-Atlantic regions. This strategic expansion comes as Lamar demonstrates strong financial performance, with annual revenues of $2.22 billion and impressive returns over both three-month and five-year periods.
In the transaction, Verde contributed its assets to Lamar Advertising Limited Partnership, receiving common units designed to track the value of Lamar’s Class A common stock. Holders of these units receive cash distributions equal to the per share dividend paid on Lamar’s common stock and can convert units into cash or shares of Class A common stock.
Verde Outdoor was launched in 2021 by Ernest C. Garcia II and partners with initial acquisitions in Sioux City, Charleston and Savannah, later expanding through strategic acquisitions in Hudson Valley, New York and the Mid-Atlantic.
"We’re thrilled to have Ernie and the other Verde owners as partners, and we expect this UPREIT structure to become a template for future acquisitions with owners who want to diversify their asset bases in a tax-efficient manner," said Sean Reilly, Lamar’s Chief Executive Officer. InvestingPro data suggests positive momentum ahead, with net income expected to grow this year. Discover more insights and 6 additional ProTips with an InvestingPro subscription.
The UPREIT (Umbrella Partnership Real Estate Investment Trust) structure allows Lamar to issue partnership units on a tax-deferred basis in connection with acquisitions.
Johnsen, Fretty & Co., LLC served as financial advisor to Verde, while Snell & Wilmer acted as legal advisor. Kean Miller LLP and Hogan Lovells US LLP provided legal counsel to Lamar.
In other recent news, Lamar Advertising Company reported its first-quarter 2025 earnings, surpassing analysts’ expectations with an earnings per share (EPS) of $1.35, compared to the forecasted $1.31. However, the company’s revenue of $505.43 million fell short of the anticipated $509.2 million. Despite this revenue miss, the company maintained its full-year guidance and expects organic revenue growth of around 3% for the year. Citi analysts upgraded Lamar Advertising from Neutral to Buy, increasing the price target to $19.00, reflecting a more optimistic outlook on the advertising sector due to moderating tariff risks.
Lamar also announced a quarterly cash dividend of $1.55 per share, with total distributions expected to reach at least $6.20 per share for the year 2025. Additionally, the company expanded its stock buyback program, raising the available funds for future repurchases to $250 million. This move aligns with the company’s commitment to shareholder returns, as demonstrated by its recent $150 million stock repurchase. Lamar’s strategic focus on growth is evident through its completion of 10 mergers and acquisitions deals worth $22 million in the first quarter.
The company’s digital billboard and programmatic revenues showed significant growth, contributing positively to its financial performance. Lamar’s financial activities, including dividend increases and buyback expansions, are part of its broader strategy to enhance shareholder value. These developments reflect Lamar’s efforts to navigate economic uncertainties and bolster its market position in the advertising industry.
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