The assets to be acquired are large format displays in 11 U.S. markets, including about 600 in Los Angeles and 294 in New York. The billboards combined to generate $206 million in revenue in 2013.
For CBS Outdoor, which was spun out of CBS (CBS) in March, the deal comes a week after the company completed a planned conversion into a real estate investment trust. Company CEO Jeremy Male said the purchase would help the company to build its presence in top markets.
"It's a unique opportunity that aligns perfectly with our top-market growth strategy and will enhance the scale, quality, and depth of our portfolio which we believe will be great for our advertising partners," Male said. "Further, we expect the Van Wagner assets to contribute significantly to our REIT operations, driving increased shareholder value."
The company said that more than 90% of the acquired revenue will be derived from REIT-eligible assets.
CBS Outdoor said it intends to finance the purchase with cash on hand and with the proceeds from the issuance of additional long-term debt. The company said as part of the deal it intends to hire personnel from Van Wagner to sell and service the billboards.
Van Wagner, also of New York, said it was selling the billboards to focus its business on sports and entertainment, including selling advertising on blimps and banners pulled by small planes.