VGI Global Media Plc, Thailand's largest transit-media provider and a unit of BTS Group, has acquired 24.43% of Master Ad Plc (MACO), the country's largest outdoor media firm.
The acquisition is worth 662 million baht or nine baht a share.
Funding sources are bank loans and VGI’s cash flow.
"This investment will make us a full-service provider of out-of-home (OOH) media, expanding from transit and in-store media to outdoor media," said VGI executive chairman Kavin Kanjanapas.
He said the partnership would also make VGI the leading OOH media provider in Asean.
Master Ad is Thailand’s largest outdoor media provider, with more than 1,200 ad display boards nationwide ranging from outdoor billboards and street signs to some boards at skytrain stations and Mor Chit 2 bus terminal.
Nielsen Company (Thailand) research showed Thailand's OOH media market was valued at 10.2 billion baht last year, up slightly from 2012.
Of this, outdoor media represented 4.1 billion baht, transit media 3.5 billion and in-store media 2.6 billion.
The Media Agency Association of Thailand predicts overall ad spending will grow by 5%, boosted by the coming World Cup football tournament, while mass transit advertising alone will grow by 14%.
VGI expects private investment and marketing activity will quickly resume to normal levels if the political crisis ends in the second quarter.
If that happens, the ad market will pick up in the second half, while company revenue will grow by 13-17% for the full year.
Noppadol Tansalarak, chairman of Master Ad's executive committee, said the partnership would benefit both firms, as they could pool expertise and ad space.
Furthermore, Master Ad will offer a variety of media including outdoor, transit and in-store for its clients, he said.
VGI manages a large amount of ad space, particularly transit media, along skytrain routes, which have high potential to draw attention from upper middle-class consumers.
Master Ad's revenue grew by 7.5% on average in each of the past three years, while net profit grew by 16.6% per year.
Meanwhile, VGI earned 1.146 billion baht in profit last year, up by 27% from 2012, despite negative factors such as political uncertainty and low ad spending.
VGI shares closed yesterday on the SET at 11 baht, down 50 satang, in trade worth 256 million baht.
MACO closed at 10 baht, up 35 satang, in trade worth 705 million baht.