Talon Outdoor secures new backer as it plans global expansion

Talon Outdoor, the specialist OOH buying agency led by former Omnicom Media Group executive Barry Cupples and former Kinetic chief Eric Newnham, has changed hands.

Cupples, who joined as chief executive in 2019, and Newnham, who bought about 75% of the company in 2012, are staying on and remain minority shareholders, but their private equity backers are changing.

Mayfair Equity Partners is exiting after five years – a typical holding timeframe for private equity – to be replaced by Equistone Partners Europe.

Equistone, Mayfair and Cupples all declined to quantify the value of the deal. An Equistone spokesman would confirm only that it was in line with its stated preference for transactions in which it takes from €25m up to €200m-plus of equity in businesses with enterprise values of between €50m and €500m.

The 2017 deal raised a total of £64.1m for Talon Outdoor Limited shareholders (which included Omnicom with a 17.5% stake), according to the 2017 financial report for Harding Bidco, one of the companies set up as a vehicle for Mayfair’s investment.

The UK-incorporated Harding Bidco is, in turn, owned by Guernsey-incorporated Harding Topco, which is believed to be the company changing hands in the Equistone deal.

One source close to the deal commented that Mayfair’s return could be seen “as a good barometer of the return to normality in the outdoor sector” in the wake of the worst of the pandemic.

Daniel Sasaki, managing partner at Mayfair Equity Partners, said: “Talon has crafted a special place in the market by focusing on delivering smarter, creative, technology-led, and integrated OOH communications.

"Barry and the whole Talon team have delivered exceptional growth over the last five years, underpinned by a clear vision of continuous innovation and exceptional customer service. It has been a pleasure to be their partner, providing specialist support to achieve their digital transformation and US growth ambitions.”

The 2022 deal could be expected to place a significantly higher value on Talon, given that at the time of the 2017 deal it was very much a UK company with a nascent US operation.

Talon Media Limited finished 2016 with £181m annual turnover and 89 employees, while in the present day, Cupples told Campaign, the wider group is on course to achieve 2022 turnover of close to £400m in the UK and $200m in the US, and currently has just over 200 employees.

Cupples also confirmed that Talon survived the pandemic without needing fresh equity and claimed the subsequent recovery had been so strong that he decided to move forward plans to open offices outside the UK and US from late 2022 to the first half to the year. So, while the company has long handled international clients through independent partner agencies, it now also has its own regional hubs in Dubai and Singapore.

Up to three acquisitions are currently in the pipeline, adding to the early 2021 joint venture with US-based Buntin Group and the 2019 of outdoor creative specialists Grand Visual in the UK and Grandesign in the US.

Cupples credited the £5.8m Grand Visual addition with boosting Talon’s fortunes in the US, where operations were less affected by pandemic advertising pullbacks than in the UK.

“Grand Visual has been brilliant for us in the US, my god. Having a full-service agency capability where you've got end-to-end solutions including dynamic creative has gone down a storm in the US."

At the nadir in the UK the business was fortunate to have the government – “virtually the only major advertiser on out of home for three or four months”, Cupples recalls – as a client. Talon’s revenues outside the US dropped 32% between 2019 and 2020, from £349m to £237m.

“I used that time to buffer up the US business, to put all of our energies behind driving growth. We pitched for a lot of business – we have Havas in the UK and we pitched for the Havas US business and won it. That attracted a lot of longer tail stuff to go with it so we went from $50m to $150m in the US very quickly."

He added: "Eventually in the UK we came out of Covid and we had that incredible bounce in 2021. Although 2021 was a much better trading year than 2020 it wasn't great until the last quarter and then out of home was the recipient of a hell of a lot of released monies that didn't have space in TV.”

Having regained the ground lost to the pandemic Cupples is looking to drive growth by adding direct clients – albeit Talon’s relationship with holding company clients Omnicom and Havas remains strong – and growing outdoor’s share of media spend as the business digitises and moves from buynig sites to buying audiences.

Digital inventory now accounts for more than 70% of Talon’s billings and Cupples is proud of having built a “proper” tech stack during 2019 and 2020, which gives him “the ammunition to argue that outdoor should be commanding a greater share of the pie”.

Mayfair have been “brilliant partners”, Cupples said, adding that Talon is “particularly excited for the opportunities the new Equistone partnership will create for its clients across the globe”.

Paul Harper, partner at Equistone, said: “We have been hugely impressed by the management team’s wealth of sector experience, strong track record and clear ambition to further scale the business, and we are excited to work with Barry and his team to accelerate the investment into talent and technology on a global basis.

"OOH media has remained a robust and attractive broadcast media for brands to communicate with customers, with the market continuing to digitise and invest in programmatic solutions."