Moscow-based Gallery Company acquired three Ukrainian operators, giving it a 5 percent share on the market
A Russian outdoor advertisement company has acquired three Ukrainian operators and is poised to take over a fourth.
The acquisitions will give the Moscow-based Gallery Company, the second largest outdoor ad company in Russia, a 5 percent share on the Ukrainian outdoor ad market. Sources said the market is worth $200 million, but growing fast. Media magnate Rupert Murdoch’s News Corp took notice of the market’s potential years ago when it snapped up a stake in a domestic billboard company.
Gallery is eyeing its share of the pie.
“We believe the Ukrainian outdoor ad market is among the fastest growing,” said Olga Grishaeva, the Gallery’s public relations director.
Given the Ukrainian outdoor ad market is saturated with 700 companies, but only 20 large players, which account for half of the market, 5 percent is a “good start,” said Artem Bidenko, chair of the Ukrainian Outdoor Advertisement Association Council. The $200 million market gives companies an average annual return of 25 percent, he said.
The company announced it paid $26 million for three Ukrainian companies: Octagon Outdoor in Kyiv, VVV in Simferopol, and Luhansk-based Stroyitelniye Technologiyi.
Gallery is also eyeing the Ekosvit agency in Kyiv, worth an estimated $13 million. Gallery’s shareholders are the European Bank for Reconstruction and Development, Baring Vostok Private Equity Fund and Morgan Stanley Principal Investments.
Its ambitious plans are to gain 25 percent control of the Ukrainian market in two years, said Salim Tharani, Gallery’s chief executive officer.
“The growth will be ensured by both organic growth and through mergers and acquisitions,” he said.
Gallery’s goals are realistically attainable, Bidenko said.
