Boston Omaha Closes in on IPO

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Boston Omaha has filed an amended S-1 form with the U.S. Securities and Exchange Commission (SEC) regarding its initial public offering (IPO). The firm expects to price its 5.5 million shares in the range of $12 to $14 per share, with an overallotment option for an additional 825,000 shares. At the maximum price, the entire offering is valued up to $88.55 million. The company intends to list its shares on the Nasdaq under the symbol BOMN.

The sole underwriter for this offering is Cowen.

This company commenced its current business operations in June 2015 and currently operates three separate lines of business: outdoor billboards, surety insurance and related brokerage activities, and investments in real estate management and related activities.

Since June 2015, Boston Omaha has acquired numerous billboard structures, many with multiple faces, including both static and digital displays, in Alabama, Florida, Georgia and Wisconsin. As of June 13, 2017, it owned 532 billboard structures containing a total of 907 faces, of which 30 are digital displays.

The company continues to evaluate possible acquisitions of additional billboard displays and expects to use a significant portion of its currently available cash and cash proceeds from this offering to expand its presence in current markets and new regions of the United States.

Boston Omaha described its reason for pursuing billboards:

We are attracted to the outdoor display market due to a number of factors, including the size of the market, estimated for billboards to exceed $4.9 billion in the U.S., high regulatory barriers to building new billboards in some states, low maintenance and other costs for static billboards, and the ability to use our large number of locations to attract larger regional and national clients wishing to market their products and services. In addition, unlike other advertising industries, the Internet has not had a material adverse impact on outdoor advertising revenues. Reported revenues for out-of-home advertising have continued to rise, in contrast to print and other advertising which compete with Internet-based digital advertising for the consumer’s attention at home. The billboard industry’s three largest companies are estimated to account for more than 50% of the industry’s total revenues and several industry sources estimate that there are a large number of other companies serving the remainder of the market, providing a potentially significant source of billboards which may be acquired in the future.

The company intends to use the net proceeds from this offering to fund future billboard acquisitions, expand its insurance activities, expand its investments in real estate and acquire other businesses. The remainder of proceeds will be put toward working capital and general corporate purposes.