Reagan Outdoor Advertising buys local Fairway operations

A Salt Lake City-based billboard company plans to buy the Fairway Outdoor Advertising operations in Chattanooga, Indianapolis and Rochester, Minnesota, as part of the ongoing split up and sale of one of the nation’s biggest billboard companies.

Reagan Outdoor Advertising, a privately-held operator of billboards in Utah, Nevada and Texas, announced Wednesday a definitive agreement to buy 5,300 Fairway displays in three U.S. markets, including about 1,600 billboards in Chattanooga. The purchase, which will be financed with a debt restructuring and cash on hand, will nearly double the size of Reagan’s footprint and make Reagan one of the biggest outdoor advertisers in the country.

“Over the course of our 50-year history, we have established a track record of unlocking tremendous value from businesses that we acquire,” said Bill Reagan, the founder and CEO of the 54-year-old company that bears his name and remains a family-owned business. “We see significant potential across Indianapolis, Chattanooga and Rochester, and intend to invest in the people and assets in these markets accordingly.”

Reagan declined to detail terms of the sale, which is still subject to regulatory review. But he said the purchase of the Fairway operations in the three cities represents one of the biggest of some 20 acquisitions made by Reagan Outdoor Advertising over the past half century.

“This will nearly double the number of signs we have, so it’s a good opportunity,” Reagan said. “Chattanooga is kind of a unique market, and we just felt like it had a good growth opportunity that has been under performing in recent months.”

Fairway, the largest billboard operator in Chattanooga, has been owned for the past four years by the Chicago-based private equity firm of GTCR, which is in the process of selling off its Fairway holdings. In December, Lamar Advertising Co. acquired about 8,500 of Fairway’s billboard operations in five U.S. markets for $418.5 million.

Fairway is still trying to sell the rest of its U.S. operations in three other markets.

Reagan said by using the company’s industry expertise and strengthening client relationships, “we plan to accelerate Reagan’s growth trajectory” and look for other opportunities for growth.

Reagan started his billboard company when he was only 20 years old and a sophomore in college.

“I’d go to school and then go out, dig a hole and put up a sign and I did that all the way through graduate school,” Reagan recalled.

With the latest acquisition, Reagan will have about 9,000 billboards and rank as the No. 4 outdoor advertising company in the country.

For all of its size and national reach, Reagan said the billboard business in markets like Chattanooga is still locally focused and he plans to maintain the current staff and operations as he works to expand sales.

Chattanooga is the 83rd biggest advertising market in the country. Fairway previously acquired other local billboard operators, including Mashburn Outdoor in 2014, and LaFoy Outdoor Advertising and Hall Outdoor Advertising in 2015.

Reagan said he previously looked at buying into the Chattanooga market in the 1980s when Peterson Outdoor Advertising was the major billboard company in town after buying the former Turner billboard company.

“Here we are 30 years later finally buying this company,” he said.

Amid the changing advertising markets continually being challenged by the growth of social and digital media, Reagan concedes that acquisitions in traditional media companies are often more uncertain. Fairway has expanded into social media, in addition to its traditional sign business.

Reagan said he is a conservative investor and previously invested in a hedge fund operated by L. Hardwick “Hacker” Caldwell in Chattanooga and once played at the Honors Course in Ooltewah. But he has only been to Chattanooga twice before.

“I’m sitting here at age 74 wondering if this is the greatest deal I have ever done or the dumbest deal,” he said. “I’ve seen the tremendous erosion in other media due to internet advertising, but we have not been hit as much by that trend and now we will have a business that has developed a parallel product to sell with our product that provides internet tie in. I feel pretty good about our future.”

Contact Dave Flessner at dflessner@timesfree press.com or at 423-7576340.