<PAGE>
THIS PROSPECTUS RELATES TO REGISTRATION STATEMENT (FILE NO. 333-32607) AND IS
BEING FILED PURSUANT TO RULE 424(B)(4) OF GENERAL RULES AND REGULATIONS OF THE
SECURITIES ACT OF 1933.
[LOGO]
5,500,000 SHARES
UNIVERSAL OUTDOOR HOLDINGS, INC.
COMMON STOCK
----------
Of the shares of Common Stock ("Common Stock") offered hereby (the
"Offering"), 2,109,105 shares are being sold by Universal Outdoor Holdings, Inc.
("Universal Outdoor" or the "Company") and 3,390,895 shares are being sold by
certain selling stockholders named herein (the "Selling Stockholders"). See
"Principal and Selling Stockholders." The Company will not receive any of the
proceeds from the sale of Common Stock by the Selling Stockholders.
The Common Stock is quoted on the Nasdaq National Market under the symbol
"UOUT." On August 14, 1997, the last reported sale price for the Common Stock,
as reported on the Nasdaq National Market, was $34.94 per share.
--------------
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 9 HEREOF.
-------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
PRICE UNDERWRITING PROCEEDS PROCEEDS TO
TO DISCOUNTS AND TO SELLING
PUBLIC COMMISSIONS COMPANY(1) STOCKHOLDERS
<S> <C> <C> <C> <C>
Per Share........................... $35.000 $1.487 $33.513 $33.513
Total(2)............................ $192,500,000 $8,178,500 $70,682,436 $113,639,064
</TABLE>
(1) Before deducting expenses of the Offering payable by the Company estimated
at $500,000.
(2) The Company and two of its senior executives have granted the Underwriters
30-day options to purchase up to an aggregate of 825,000 additional shares
of Common Stock solely to cover over-allotments, if any. To the extent that
the option is exercised, the Underwriters will offer the additional shares
at the Price to Public shown above. If the option is exercised in full, the
total Price to Public, Underwriting Discounts and Commissions, Proceeds to
Company and Proceeds to Selling Stockholders will be $221,375,000,
$9,405,275, $84,506,548 and $127,463,177 respectively. See "Underwriting"
and "Principal and Selling Stockholders."
--------------
The shares of Common Stock are offered by the several Underwriters subject
to prior sale, when, as and if delivered to and accepted by them, and subject to
the right of the Underwriters to reject any order in whole or in part. It is
expected that delivery of the shares of Common Stock will be made at the offices
of Alex. Brown & Sons Incorporated, Baltimore, Maryland, on or about August 20,
1997.
ALEX. BROWN & SONS
INCORPORATED
BEAR, STEARNS & CO. INC.
DONALDSON, LUFKIN & JENRETTE SECURITIES
CORPORATION
THE DATE OF THIS PROSPECTUS IS AUGUST 15, 1997.
<PAGE>
<TABLE>
<S> <C>
MIDWEST EAST
- - --Chicago, IL --New York/New Jersey
- - --Minneapolis, MN --Philadelphia, PA
- - --Indianapolis, IN --Baltimore, MD
- - --Milwaukee, WI --Washington, DC
- - --Des Moines, IA --Wilmington, DE
--Salisbury, MD
</TABLE>
[MAP OF THE UNITED STATES
ANNOTATED TO SHOW COMPANY MARKETS]
OUT OF HOME
- - --Mall Media
<TABLE>
<S> <C>
MIDSOUTH FLORIDA
- - --Memphis, TN --Orlando, FL
- - --Myrtle Beach, SC --Jacksonville, FL
- - --Chattanooga, TN --Ocala, FL
- - --Evansville, IN --Atlantic Coast, FL
- - --Dallas, TX --Gulf Coast, FL
</TABLE>
<PAGE>
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION AND CONSOLIDATED FINANCIAL STATEMENTS, INCLUDING NOTES THERETO,
APPEARING IN THE DOCUMENTS INCORPORATED BY REFERENCE IN THIS PROSPECTUS. AS USED
HEREIN, THE "COMPANY" MEANS UNIVERSAL OUTDOOR HOLDINGS, INC., TOGETHER WITH ITS
CONSOLIDATED SUBSIDIARIES, UNLESS THE CONTEXT OTHERWISE REQUIRES. "UOI" REFERS
TO UNIVERSAL OUTDOOR, INC. AND ITS CONSOLIDATED SUBSIDIARIES, WHICH CONSTITUTE
THE OPERATING SUBSIDIARIES OF THE COMPANY. THE TERM "MARKET" REFERS TO THE
GEOGRAPHIC AREA CONSTITUTING A METROPOLITAN STATISTICAL AREA DELINEATED BY THE
U.S. CENSUS BUREAU. "EBITDA" HAS THE MEANING SET FORTH IN FOOTNOTE (3) ON PAGE 8
HEREOF AND "EBITDA MARGIN" HAS THE MEANING SET FORTH IN FOOTNOTE (4) ON PAGE 8
HEREOF. UNLESS OTHERWISE NOTED, THE INFORMATION INCLUDED IN THIS PROSPECTUS
ASSUMES THAT THE UNDERWRITERS' OVER-ALLOTMENT OPTION HAS NOT BEEN EXERCISED.
THE COMPANY
The Company is a leading outdoor advertising company operating approximately
33,000 advertising display faces in four large regions: the Midwest (Chicago,
Minneapolis/St. Paul, Indianapolis, Milwaukee and Des Moines), Florida (Orlando,
Jacksonville, Ocala and the Atlantic Coast and Gulf Coast areas of Florida), the
Midsouth (Evansville (IN), Dallas, Memphis/Tunica and Chattanooga (TN) and
Myrtle Beach (SC)) and the East (New York, Washington D.C., Baltimore,
Philadelphia, Northern New Jersey, Wilmington (DE), Salisbury (MD) and Hudson
Valley (NY)). The Company's advertising display face inventory includes transit
display faces and kiosks in shopping malls, in addition to billboards and other
outdoor display faces. The Company believes that the diversity of its
advertising display inventory throughout its markets provides its customers with
a unique opportunity to select a variety of media and outlets in delivering
their marketing messages. The Company's customer base is also highly
diversified, with no one category of customers accounting for more than 16.0% of
net revenues for the six months ended June 30, 1997. During this same time
period, tobacco advertising accounted for approximately 10.6% of net revenues.
See "Risk Factors--Negative Implications of Tobacco Industry Regulation on
Outdoor Advertising."
SECOND QUARTER AND SIX MONTHS RESULTS
On July 31, 1997, the Company announced the results of its operations for
the second quarter and first six months of 1997. For the three months ended June
30, 1997, the Company reported record net revenues and EBITDA of $53.1 million
and $28.3 million, respectively, which compare favorably to the net revenues and
EBITDA of $17.8 million and $10.0 million, respectively, for the same period in
1996. For the six months ended June 30, 1997, the Company had net revenues and
EBITDA of $97.1 million and $49.5 million, respectively, which compare favorably
to the net revenues and EBITDA for the same period in 1996 of $26.2 million and
$13.6 million, respectively. The Company believes that its EBITDA Margin of
50.9% for the six months ended June 30, 1997 is among the highest in the
industry. There can be no assurance that the Company's future net revenues and
EBITDA Margins will equal or exceed those which have been achieved to date. In
addition, the Company has historically had net losses and has substantial
indebtedness. See "Risk Factors -- Substantial Indebtedness of the Company;
Potential Inability to Service Indebtedness" and "--Prior Period Losses."
3
<PAGE>
The Company has a significant presence in each of the regional markets in
which it operates. The following table sets forth, as of July 31, 1997, certain
information with respect to the Company's outdoor markets:
<TABLE>
<CAPTION>
TOTAL
30-SHEET 8-SHEET DISPLAY
BULLETINS POSTERS POSTERS TRANSIT FACES
----------- ----------- ----------- ----------- -----------
MIDWEST:
<S> <C> <C> <C> <C> <C>
Chicago...................................... 713 -- 3,515 -- 4,228
Indianapolis................................. 257 1,096 101 530 1,984
Minneapolis/St. Paul......................... 456 1,332 -- -- 1,788
Des Moines................................... 86 573 9 -- 668
Milwaukee.................................... 261 -- 338 -- 599
MIDSOUTH:
Evansville................................... 278 699 -- -- 977
Dallas....................................... 257 -- 1,224 -- 1,481
Memphis...................................... 705 1,229 129 529 2,592
Chattanooga.................................. 329 642 -- -- 971
Myrtle Beach................................. 738 468 -- -- 1,206
FLORIDA:
Orlando...................................... 820 1,087 -- -- 1,907
Ocala........................................ 864 198 -- -- 1,062
Atlantic Coast............................... 664 -- -- -- 664
Jacksonville................................. 448 780 -- -- 1,228
Gulf Coast................................... 457 -- -- -- 457
EAST:
Philadelphia................................. 355 2,080 -- 192 2,627
Washington................................... 86 586 -- -- 672
Salisbury.................................... 401 477 -- -- 878
Wilmington................................... 160 909 45 -- 1,114
Baltimore.................................... 209 1,234 -- 1,917 3,360
New York/New Jersey.......................... 440 553 33 -- 1,026
----- ----------- ----- ----- -----------
Total...................................... 8,984 13,943 5,394 3,168 33,071(1)
----- ----------- ----- ----- -----------
----- ----------- ----- ----- -----------
</TABLE>
- - ------------------------
(1) Includes 1,582 kiosk displays in malls throughout the United States.
4
<PAGE>
OPERATING STRATEGY
The Company's objective is to remain the leading provider of outdoor
advertising services in each of its four regional operating areas and to expand
into attractive new markets. The Company believes that a regional operating
approach provides it with significant opportunities to increase revenue and
achieve cost savings by delivering to local and national advertisers efficient
access to multiple markets or highly targeted areas. Management intends to
continue to pursue the following operating strategy:
- ENHANCE EXISTING BUSINESS. The Company intends to expand its existing
business by maximizing rates and occupancy levels in each of its markets,
increasing market penetration, pursuing strategic acquisitions in and proximate
to its markets, capitalizing on technology advances, and maintaining a
decentralized low cost operating structure.
- DEVELOP OTHER OUT-OF-HOME MEDIA. The Company seeks to develop other
forms of out-of-home media that have potential for rapid growth, such as
displays in shopping malls, airports and bus shelters and transit advertising in
order to enhance revenues in existing markets and provide access to new markets.
- EXPAND INTO INTERNATIONAL MARKETS. The Company believes that an
additional area of substantial growth may come from the strategic expansion into
markets outside the United States. For example, the Company recently executed
letters of intent to enter into two joint venture agreements with companies in
Beijing, the capital of China, and in Dalian, a major port city in the Laoning
Province, to provide outdoor advertising services in areas of China undergoing
rapid growth and modernization.
The Company believes that its experienced senior management team is an
important asset in the successful implementation of its operating strategy.
Daniel L. Simon, President and Chief Executive Officer and the founder of the
Company, has spent his entire professional career of 23 years in the outdoor
advertising business. Brian T. Clingen, Vice President and Chief Financial
Officer, and Paul G. Simon, Vice President and General Counsel, together possess
over 24 years of experience in the industry.
The Company was incorporated in Delaware in 1991 and its principal executive
office is located at 311 S. Wacker Drive, Chicago, Illinois 60606, and its
telephone number is (312) 431-0822.
RECENT DEVELOPMENTS
Since the Company's initial public offering in July 1996, the Company has
completed the acquisition of 12 outdoor advertising businesses or assets for an
aggregate amount of approximately $600 million. In addition, the Company has
entered into letters of intent for the purchase of two additional outdoor
advertising businesses, all within existing markets, for an aggregate purchase
price of $27.0 million. The Company believes that these acquisitions will
significantly strengthen its market presence in the midwest and southeast
regions of the United States, create a substantial presence in the east coast
region and allow the Company to (i) continue to be a leading operator of outdoor
advertising services in each of its markets; (ii) capitalize on greater
operating efficiencies associated with operating in closely proximate markets;
and (iii) aggressively package its display inventory across its markets and
regions.
COMPLETED ACQUISITIONS
THE POA ACQUISITION. In October 1996, the Company acquired Outdoor
Advertising Holdings, Inc. for approximately $240.0 million in cash (the "POA
Acquisition"). As a result of the POA Acquisition, the Company acquired a total
of approximately 6,337 advertising display faces consisting of bulletins and
posters in five markets located in the southeast United States, including
Orlando, Ocala and Palm Beach, as well as the Atlantic Coast and Gulf Coast
areas of Florida, and Myrtle Beach and Chattanooga.
THE REVERE ACQUISITION. In December 1996, the Company acquired Revere
Holding Corp. for approximately $125.0 million in cash (the "Revere
Acquisition"). As a result of the Revere Acquisition, the Company acquired a
total of approximately 8,853 advertising display faces located in markets on the
5
<PAGE>
east coast of the United States, including Philadelphia, Washington D.C.,
Wilmington and Salisbury, as well as 1,917 transit display faces located in
Baltimore and 1,582 kiosk displays located in malls throughout the United
States.
THE MEMPHIS/TUNICA ACQUISITION. In January 1997, the Company acquired a
total of approximately 2,018 advertising display faces consisting of bulletins
and posters located in and around Memphis, Tennessee and Tunica County,
Mississippi for approximately $71.0 million plus 100,000 shares of the Company's
Common Stock.
THE MATTHEW ACQUISITION. In January 1997, the Company acquired certain of
the assets of Matthew Outdoor Advertising Acquisition Co. L.P. ("Matthew") for
approximately $40.0 million in cash and assumption by the Company of certain
liabilities of Matthew (the "Matthew Acquisition"). As a result of the Matthew
Acquisition, the Company acquired a total of approximately 1,035 advertising
display faces located in three markets, including metro New York, northern New
Jersey and Hudson Valley.
THE PENN ACQUISITION. In February 1997, the Company agreed to acquire the
stock of Penn-Baltimore, Inc. from Lamar Advertising Company for $46.5 million
in cash (the "Penn Acquisition"). The Penn Acquisition was consummated in June
1997 and the Company acquired approximately 1,450 advertising display faces in
the Baltimore metropolitan area.
THE ALLIED ACQUISITION. In April 1997, the Company agreed to acquire
certain assets of Allied Outdoor Advertising, Inc. for $51.2 million in cash
(the "Allied Acquisition"). The Allied Acquisition was consummated in July 1997
and the Company acquired approximately 90 advertising display faces in New York
City and New Jersey.
OTHER COMPLETED ACQUISITIONS. In September 1996, the Company purchased
certain assets of (i) Iowa Outdoor Displays for approximately $1.8 million in
cash and (ii) The Chase Company for approximately $5.8 million in cash. As a
result of these acquisitions, the Company acquired approximately 160 advertising
display faces consisting primarily of posters in and around Des Moines and
approximately 245 advertising display faces consisting primarily of bulletins in
and around Dallas.
In February 1997, the Company acquired a total of approximately 135
advertising display faces located in and around Evansville, Indiana from
Ad-Craft, Inc. for approximately $5.5 million in cash. The Company also acquired
12 existing advertising display faces and 35 in process display faces in New
Jersey from David Klein Outdoor Advertising, Inc. for approximately $5.3 million
in cash.
In March 1997, the Company acquired a total of approximately 600 bus shelter
panels in and around Memphis, Tennessee for approximately $8.5 million in cash
from TransAd, Inc.
In July 1997, the Company acquired a total of approximately 143 advertising
display faces in and around Memphis, Tennessee for approximately $2.5 million in
cash from Swaney Outdoor, Inc.
PENDING ACQUISITIONS
THE GAESS ACQUISITION. In July 1997, the Company entered into a letter of
intent to acquire substantially all of the outdoor advertising assets of Great
Outdoor, Inc., Media Outdoor Advertising and Media Displays, Inc., collectively
operating as Gaess Outdoor, for approximately $18 million (the "Gaess
Acquisition"). The Gaess Acquisition will further enhance the Company's position
in the metro New York and northern New Jersey market, adding 25 advertising
display faces, a number of which are located in high profile locations.
THE NEW YORK SIGN ACQUISITION. In July 1997, the Company entered into a
letter of intent to acquire substantially all of the outdoor advertising assets
of New York Signs for approximately $9 million. Such acquisition will further
enhance the Company's position in New York City, adding 17 advertising display
faces.
Each of the pending acquisitions is subject to numerous conditions including
the negotiation of final acquisition agreements and certain of the acquisitions
will be subject to clearance under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended. There can be no assurance that any of the pending
acquisitions will be consummated or that they will not be delayed due to
antitrust clearance or other factors.
6
<PAGE>
THE OFFERING
<TABLE>
<S> <C>
Common Stock offered by the Company.................. 2,109,105 shares
Common Stock offered by the Selling Stockholders..... 3,390,895 shares
Common Stock to be outstanding after the Offering.... 26,327,757 shares(1)
Use of Proceeds to the Company....................... To repay existing indebtedness under
the Company's revolving credit
facility incurred in connection with
recent acquisitions. Such amounts
may be reborrowed in the future to
fund pending acquisitions. The
Company will not receive any
proceeds from the sale of Common
Stock by the Selling Stockholders.
Nasdaq National Market Symbol........................ UOUT
</TABLE>
- - ------------------------
(1) Excludes 2,347,078 shares of Common Stock issuable pursuant to the 1996
Warrant Plan, and 387,200 shares issuable pursuant to outstanding on
Noteholder Warrants.
SUMMARY CONSOLIDATED FINANCIAL AND OTHER DATA
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
---------------------------------------------------------------- --------------------
1991 1992 1993 1994 1995 1996 1996 1997(5)
--------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Gross revenues........................ $ 21,435 $ 27,896 $ 28,710 $ 33,180 $ 38,101 $ 84,939 $ 29,366 $ 106,177
Net revenues(1)....................... 18,835 24,681 25,847 29,766 34,148 76,138 26,239 97,113
Direct advertising expenses........... 7,638 10,383 10,901 11,806 12,864 26,468 9,520 38,104
General and administrative expenses... 3,515 3,530 3,357 3,873 4,645 10,648 3,086 9,549
Depreciation and amortization......... 5,530 7,817 8,000 7,310 7,402 18,286 4,674 27,088
Non cash compensation for common stock
warrants............................ 9,000 9,000 --
Operating income...................... 2,152 2,951 3,589 6,777 9,237 11,736 (41) 22,372
Interest expense...................... 6,599 9,591 9,299 11,809 12,894 19,567 8,441 21,958
Other (expense) income, net........... (53) 291 (351) (134) (46) (1,398) (1,674) 514
Income (loss) before extraordinary
item(2)............................. (4,500) (6,349) (6,061) (5,166) (3,703) (9,229) (10,156) 928
Income (loss) before income tax....... (4,500) (6,349) (9,321) (5,166) (3,703) (35,803) (10,156) 928
Net income (loss) per share........... (0.59) (0.83) (1.22) (0.67) (0.48) (2.27) (1.33) 0.04
Weighted average common and equivalent
shares outstanding.................. 7,654 7,654 7,654 7,654 7,654 15,787 7,654 25,864
OTHER DATA:
EBITDA(3)............................. $ 7,682 $ 10,768 $ 11,589 $ 14,087 $ 16,639 $ 39,022 $ 13,633 $ 49,460
EBITDA Margin(4)...................... 40.8% 43.6% 44.8% 47.3% 48.7% 51.3% 52.0% 50.9%
Capital expenditures.................. 2,047 2,352 2,004 5,671 5,620 7,178 2,943 8,631
</TABLE>
<TABLE>
<CAPTION>
JUNE 30,
--------------------
1996 1997
--------- ---------
<S> <C> <C>
BALANCE SHEET DATA:
Working capital.......................................................................... $ 8,345 $ 16,704
Total assets............................................................................. 179,175 853,689
Total long-term debt..................................................................... 182,673 510,316
Common stockholders' equity (deficit).................................................... (9,667) 230,856
</TABLE>
- - ----------------------------------
(1) Net revenues are gross revenues less agency commissions.
7
<PAGE>
(2) Extraordinary item represents loss on early extinguishment of debt.
(3) "EBITDA" is operating income before depreciation and amortization and other
non cash charges. Management believes that EBITDA, as presented, represents
a useful measure of assessing the performance of the Company's ongoing
operating activities as it reflects the earnings trends of the Company and
is a measure of net cash generated by the normal operating activity of the
business. EBITDA is not intended to represent net cash provided by operating
activities as defined by generally accepted accounting principles and should
not be considered as an alternative to net income (loss) as an indicator of
the Company's operating performance or to net cash provided by operating
activities as a measure of liquidity. The Company believes EBITDA is a
measure commonly reported and widely used by analysts, investors and other
interested parties in the media industry. Accordingly, this information has
been disclosed herein to permit a more complete comparative analysis of the
Company's operating performance relative to other companies in the media
industry.
(4) "EBITDA Margin" is EBITDA stated as a percentage of net revenues. Management
believes EBITDA Margin, as presented, represents a useful measure of the
percent of net revenues reflected in EBITDA, thereby addressing the cash
used in operations.
(5) Amounts include financial results beginning June 3, 1997 from operations
acquired pursuant to the Penn Acquisition.
8
<PAGE>
CAUTIONARY STATEMENTS FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This Prospectus contains certain forward-looking statements that involve
substantial risks and uncertainties. When used in this Prospectus, the words
"anticipate," "believe," "estimate," and "expect" and similar expressions as
they relate to the Company or its management are intended to identify such
forward-looking statements. The Company's actual results, performance or
achievements could differ materially from the results expressed in, or implied
by, these forward-looking statements. Factors that could cause or contribute to
such differences include those discussed in "Risk Factors."
RISK FACTORS
IN ADDITION TO THE OTHER INFORMATION IN THIS PROSPECTUS, THE FOLLOWING
FACTORS SHOULD BE CONSIDERED CAREFULLY IN EVALUATING AN INVESTMENT IN THE
SECURITIES OFFERED BY THIS PROSPECTUS.
SUBSTANTIAL INDEBTEDNESS OF THE COMPANY; POTENTIAL INABILITY TO SERVICE
INDEBTEDNESS. The Company has substantial indebtedness. In October 1996 and
December 1996, UOI issued $225.0 million and $100.0 million, respectively, of
senior subordinated notes due 2006 (the "Notes"). As of June 30, 1997, the
Company's total long-term debt was approximately $510.3 million, and interest
expense was approximately $22.0 million, or 22.7% of net revenues, for the six
months ended June 30, 1997. The Company's level of consolidated indebtedness
could have important consequences to the holders of Common Stock, including the
following: (i) a substantial portion of the Company's cash flow from operations
must be dedicated to the payment of the principal of and interest on its
indebtedness and will not be available for other purposes; (ii) the ability of
the Company to obtain financing in the future for working capital needs, capital
expenditures, acquisitions, investments, general corporate purposes or other
purposes may be materially limited or impaired; and (iii) the Company's level of
indebtedness may reduce the Company's flexibility to respond to changing
business and economic conditions. Subject to certain limitations contained in
its outstanding debt instruments, credit agreement and the Notes, the Company or
its subsidiaries may incur additional indebtedness to finance working capital or
capital expenditures, investments or acquisitions or for other purposes. There
can be no assurance that the Company's EBITDA will continue to exceed its fixed
charges. A decline in EBITDA could impair the Company's ability to meet its
obligations, including for debt service, and to make scheduled principal
repayments.
PRIOR PERIOD LOSSES. The Company has historically had net losses which have
resulted in significant part from substantial depreciation and amortization
expenses relating to assets purchased in the Company's acquisitions, interest
expense associated with related indebtedness and deferred financing costs
charged to extraordinary losses. Moreover, additional acquisitions will result
in increased depreciation, amortization and interest expenses. There can be no
assurance that the Company will generate net income in the future.
RESTRICTIONS IMPOSED BY THE COMPANY'S INDEBTEDNESS. The banks under the
Company's credit facility (the "Credit Facility") have a lien on substantially
all of the assets of UOI, including the capital stock of its subsidiaries, to
secure the indebtedness of UOI under such credit facility. The Credit Facility
and indentures governing the Notes contain restrictions on UOI's ability to
incur additional indebtedness, create liens, pay dividends, sell assets and make
acquisitions. Furthermore, the Credit Facility contains certain maintenance
tests. There can be no assurance that UOI and its subsidiaries will be able to
comply with the provisions of their respective debt instruments, including
compliance by UOI with the financial ratios and tests contained in the Credit
Facility. Breach of any of these covenants or the failure to fulfill the
obligations thereunder and the lapse of any applicable grace periods would
result in an event of default under the applicable debt instruments, and the
holders of such indebtedness could declare all amounts outstanding under the
applicable instruments to be due and payable immediately. There can be no
assurance that the assets or cash flow of the Company or the Company's
subsidiaries, as the case may be, would be sufficient to repay in full
borrowings under their outstanding debt instruments whether upon maturity or
earlier if such indebtedness were to be accelerated upon an event of default or
certain
9
<PAGE>
repurchase events or that UOI would be able to refinance or restructure its
payments on such indebtedness or repurchase the Notes. If such indebtedness were
not so repaid, refinanced or restructured, the lenders could proceed to realize
on their collateral. In addition, any event of default or declaration of
acceleration under one debt instrument could also result in an event of default
under one or more of UOI's other debt instruments. See "-- Substantial
Indebtedness of the Company; Potential Inability to Service Indebtedness."
COMPANY'S DEPENDENCY ON UOI; HOLDING COMPANY STRUCTURE. The Company is a
holding company with no business operations of its own. The Company's only
material asset is all of the outstanding capital stock of UOI, through which the
Company conducts its business operations. Accordingly, the Company will be
dependent on the earnings and cash flow, and dividends and distributions, from
UOI to pay its expenses and to pay any cash dividends or distributions on the
Common Stock that may be authorized by the Board of Directors of the Company.
UOI has substantial cash interest expense due on the Notes. There can be no
assurance that UOI will generate sufficient cash flow to pay dividends or
distribute funds to the Company or that applicable state law and contractual
restrictions, including negative covenants contained in the debt instruments of
UOI, will permit such dividends or distributions. The terms of the Credit
Facility and the Notes currently restrict UOI from paying dividends or making
distributions except in very limited circumstances, including paying certain
expenses of the Company. See "-- Substantial Indebtedness of the Company;
Potential Inability to Service Indebtedness."
POTENTIAL INABILITY TO MAKE OR FINANCE ACQUISITIONS. The Company's growth
has been facilitated by strategic acquisitions that have substantially increased
the Company's inventory of advertising display faces. One element of the
Company's operating strategy is to make acquisitions in new and existing
markets. There can be no assurance that suitable acquisition candidates can be
found. The Company is likely to face competition from other outdoor advertising
and media companies for acquisition opportunities that are available. In
addition, if the prices sought by sellers of outdoor advertising display faces
and companies continue to rise, the Company may find fewer acceptable
acquisition opportunities. There can be no assurance that the Company will have
sufficient capital resources to complete acquisitions or that acquisitions can
be completed on terms acceptable to the Company. Also, in the Minneapolis/St.
Paul market, the Company is subject to a consent judgment that restricts the
Company's ability to purchase outdoor advertising display faces until February
1, 2001. As part of its regular on-going evaluation of strategic acquisition
opportunities, the Company is currently engaged in a number of separate and
unrelated discussions concerning possible acquisitions, some of which may be
material in size. The purchase price of such acquisitions may require additional
debt or equity financing on the part of the Company.
CHALLENGES OF INTEGRATION OF ACQUISITIONS. Since July 1996, the Company has
completed 12 acquisitions. The Company faces significant challenges in
integrating the operations acquired in connection with such acquisitions with
those of the Company, particularly in geographic regions where the Company had
not previously operated. Integration of acquired operations will require
substantial attention from the Company's management. Diversion of management
attention from the Company's existing business could have an adverse impact on
the revenues and operating results of the Company. There can be no assurance the
Company will be able to integrate such acquired operations successfully.
Furthermore, there can be no assurance that any pending acquisitions will be
consummated.
NEGATIVE IMPLICATIONS OF TOBACCO INDUSTRY REGULATION ON OUTDOOR ADVERTISING;
TOBACCO INDUSTRY SETTLEMENT. For the six months ended June 30, 1997,
approximately 10.6% of the Company's net revenues was derived from tobacco
advertising. The tobacco industry has recently engaged in negotiations to settle
litigation against such industry. The tobacco companies have reached a proposed
settlement that, upon the approval of Congress, will become final and binding.
Such proposed settlement would require a total ban of tobacco advertising on
outdoor billboards and signs. Any such ban may have a material adverse effect on
the Company's revenues at least in the immediate period following the imposition
of such ban while alternate sources of advertising are secured. The competition
in the outdoor advertising business for any such alternate sources of
advertising following the imposition of a total ban on tobacco advertising on
outdoor billboards and signs is expected to be intense. There can be
10
<PAGE>
no assurance that the Company will immediately replace such advertising revenue
currently attributed to the tobacco industry in the event of a total ban of
tobacco advertising on outdoor billboards and signs. Furthermore, even in the
event the advertising ban does not take place, state and local governments,
including state and local governments in areas where the Company does business,
have recently proposed and some have enacted regulations restricting or banning
outdoor advertising of tobacco in certain jurisdictions. Continued passage of
restrictions or bans on outdoor advertising in the Company's markets may
adversely affect the Company's revenues at least in the immediate period
following such regulation. Also, in August 1996, the U.S. Food and Drug
Administration issued final regulations governing certain marketing practices in
the tobacco industry. Among other things, the regulations prohibit tobacco
product billboard advertisements within 1,000 feet of schools and playgrounds
and require that tobacco product advertisements on billboards be in black and
white and contain only text. There can be no assurance as to the effect of these
regulations or this legislation on the Company's business and on its net
revenues, EBITDA and financial position. A reduction in billboard advertising by
the tobacco industry could cause an immediate reduction in the Company's direct
revenue from such advertisers and would simultaneously increase the available
space on the existing inventory of billboards in the outdoor advertising
industry. This could in turn result in a lowering of rates throughout the
industry or limit the ability of industry participants to increase rates for
some period of time. Any such consequence could have the effect of reducing the
Company's EBITDA, which could in turn reduce the Company's ability to meet its
financial obligations under the indentures governing the Notes and the Credit
Facility.
REGULATION OF OUTDOOR ADVERTISING. Outdoor advertising displays are subject
to governmental regulation at the federal, state and local levels. These
regulations, in some cases, limit the height, size, location and operation of
billboards and, in limited circumstances, regulate the content of the
advertising copy displayed on the billboards. Certain state and local
governments, including state and local governments in areas where the Company
does business, have recently proposed and some have enacted regulations
restricting or banning outdoor advertising of tobacco and liquor in certain
jurisdictions. The City Council of Chicago is considering and is expected to
enact in 1997 a proposed ordinance prohibiting cigarette and alcohol advertising
in public areas of the city, except as otherwise specified. Some governmental
regulations prohibit the construction of new billboards or the replacement,
relocation, enlargement or upgrading of existing structures. Some cities have
adopted amortization ordinances under which, after the expiration of a specified
period of time, billboards must be removed at the owner's expense and without
the payment of compensation. Ordinances requiring the removal of a billboard
without compensation, whether through amortization or otherwise, are being
challenged in various state and federal courts with conflicting results. Other
than in the Company's Jacksonville market, amortization ordinances have not
materially affected operations in the Company's markets. As a result of a
settlement of litigation related to certain assets in the Jacksonville market
prior to their acquisition, the Company removed 165 outdoor advertising
structures in 1995 and is required to remove an additional 546 (of its total of
1,493) outdoor advertising structures over the next 19 years with 317 of such
structures to be removed between 1995 and 1998. There can be no assurance that
these removals will not adversely affect the Company's results of operations. In
addition, no assurance can be given as to the effect on the Company of existing
laws and regulations or of new laws and regulations that may be adopted in the
future. Continued restrictions and bans on outdoor advertising in the Company's
markets may adversely affect the Company's revenues at least in the immediate
period following such regulations. See "-- Negative Implications of Tobacco
Industry Regulation on Outdoor Advertising."
NEGATIVE EFFECTS OF A DECLINE IN GENERAL ECONOMIC CONDITIONS ON ADVERTISING
TRENDS. The Company relies on sales of advertising space for its revenues and
its operating results therefore are affected by general economic conditions as
well as trends in the advertising industry. A reduction in advertising
expenditures available for the Company's displays could result from a general
decline in economic conditions, a decline in economic conditions in particular
markets where the Company conducts business or a reallocation of advertising
expenditures to other available media by significant users of the Company's
displays.
11
<PAGE>
COMPETITION. The Company faces competition for advertising revenues from
other outdoor advertising companies, as well as from other media such as radio,
television, print media and direct mail marketing. The Company also competes
with a wide variety of other out-of-home advertising media, the range and
diversity of which has increased substantially over the past several years,
including advertising displays in shopping centers and malls, airports,
stadiums, movie theaters and supermarkets, and on taxis, trains, buses and
subways. Some of the Company's competitors are substantially larger, better
capitalized and have access to greater resources than the Company. There can be
no assurance that outdoor advertising media will be able to compete with other
types of media, or that the Company will be able to compete either within the
outdoor advertising industry or with other media.
POTENTIAL LITIGATION AGAINST THE COMPANY. From time to time, the Company is
involved in litigation in the ordinary course of business, including disputes
involving advertising contracts, site leases, employment claims and construction
matters. The Company is also involved in routine administrative and judicial
proceedings regarding permits and fees relating to outdoor advertising
structures and compensation for condemnations. None of those proceedings, in the
opinion of management, is likely to have a material adverse effect on the
Company.
RELIANCE ON KEY EXECUTIVES. The Company's success depends to a significant
extent upon the continued services of its executive officers and other key
management and sales personnel, in particular its President and Chief Executive
Officer, Daniel L. Simon. The Company has few employment contracts with its
employees, and very few of its employees are bound by non-competition
agreements. The Company maintains key man insurance on Daniel L. Simon. The
unavailability of the continuing services of its executive officers and other
key management and sales personnel could have a material adverse effect on the
Company's business.
CONTROL BY EXECUTIVE OFFICERS AND DIRECTORS. Upon consummation of the
Offering, certain of the Company's officers and directors will be beneficial
owners of (including for this purpose options exercisable within 60 days, and
warrants issued pursuant to the 1996 Warrant Plan) approximately 29.6% of the
outstanding shares of the Company's Common Stock. See "Principal and Selling
Stockholders." Such persons would have sufficient voting power to effectively
control the outcome of corporate actions submitted to the stockholders for
approval and to control the management and affairs of the Company, including the
election of the Board of Directors of the Company. As a result of such control,
certain transactions may not be possible without the approval of such
stockholders, including proxy contests, mergers involving the Company and tender
offers or other purchases of Common Stock that could give stockholders of the
Company the opportunity to realize a premium over the then-prevailing market
price for their shares of Common Stock. See "Principal and Selling
Stockholders."
DIFFICULTY IN ESTABLISHING A CHANGE OF CONTROL OR MANAGEMENT; ANTI-TAKEOVER
PROVISIONS. The level of stock ownership of the management of the Company, as
well as the provisions of Delaware corporation law and the Company's Certificate
of Incorporation and Bylaws, may have the effect of deterring hostile takeovers,
delaying or preventing changes in control or changes in management, or limiting
the ability of stockholders to approve transactions that they may deem to be in
their best interests. In addition, under the Company's Certificate of
Incorporation, the Board of Directors has the authority to issue shares of
Preferred Stock and establish the rights and preferences thereof without
obtaining stockholder approval. The Company has no present plans to issue any
shares of Preferred Stock.
SUBSTANTIAL PREVIOUSLY RESTRICTED COMMON STOCK ELIGIBLE FOR FUTURE
SALE. Approximately 90 days after the date of the Offering (upon expiration of
certain lockup agreements with the underwriters for the Offering), approximately
8.4 million shares of Common Stock outstanding as of the date of this
Prospectus, become eligible for sale immediately in reliance on Rule 144A and at
prescribed times, subject to volume and manner of sale restrictions, in reliance
on Rule 144, each promulgated under the Securities Act of 1993, as amended (the
"Securities Act"). Sales of substantial amounts of Common Stock (including
shares issued upon exercise of stock options), or the perception that such sales
could occur, could adversely affect prevailing market prices for the Common
Stock.
12
<PAGE>
USE OF PROCEEDS
The net proceeds to the Company from the sale of the 2,109,105 shares of
Common Stock offered by the Company hereby, after deducting underwriting
discounts and commissions and the estimated expenses of the Offering, are
estimated to be $70,182,000. The Company will use the net proceeds to repay
indebtedness under the Company's revolving credit facility incurred in
connection with recent acquisitions. Such amounts may be reborrowed in the
future to fund pending acquisitions. The revolving credit facility expires
September 30, 2003 and borrowings under such facility bear a variable rate of
interest based on LIBOR and which rate is currently 8.54%.
The Company will receive no proceeds from the sale by the Selling
Stockholders of the shares of Common Stock.
CAPITALIZATION
The following table sets forth the unaudited capitalization of the Company
at June 30, 1997 and as adjusted to give effect to the Offering. The table
should be read in conjunction with the consolidated financial statements and
related notes incorporated by reference herein.
<TABLE>
<CAPTION>
JUNE 30, 1997
-----------------------------
AS ADJUSTED (1)
---------------
ACTUAL
------------
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Long-term debt:
Credit Facility:
Revolving Credit Loan.......................................................... $ 106,300 $ 36,118
Acquisition Term Loan.......................................................... 75,000 75,000
9 3/4% Senior Subordinated Notes due 2006........................................ 223,681 223,681
9 3/4% Series B Senior Subordinated Notes due 2006............................... 101,413 101,413
Other notes...................................................................... 3,922 3,922
Other obligations................................................................ -- --
------------ ---------------
Total long-term debt and other obligations................................... 510,316 440,134
Common stockholders' equity........................................................ 230,856 301,038
------------ ---------------
Total capitalization......................................................... $ 741,172 $ 741,172
------------ ---------------
------------ ---------------
</TABLE>
- - ------------------------
(1) Represents actual amounts adjusted to give effect to the Offering.
13
<PAGE>
DILUTION
The net tangible deficit of the Company's Common Stock as of June 30, 1997
was approximately $6.2 million, or $0.26 per share. The net tangible deficit per
share of Common Stock represents the amount of the Company's common
stockholder's equity, less intangible assets divided by 24,112,800 shares of
Common Stock outstanding as of June 30, 1997.
Net tangible book value dilution per share of Common Stock represents the
difference between the amount per share paid by purchasers of shares of Common
Stock in this Offering and the net tangible book value per share of Common Stock
immediately after completion of the Offering. After giving effect to the sale of
2,109,105 shares of Common Stock by the Company in this Offering and the
application of the estimated net proceeds therefrom, the net tangible book value
of the Common Stock as of June 30, 1997 would have been approximately $64.0
million, or $2.43 per share of Common Stock. This represents an immediate
increase in the net tangible book value of $2.69 per share of Common Stock to
existing common stockholders and an immediate dilution in net tangible book
value of $32.57 per share of Common Stock to purchasers of Common Stock in this
Offering. The following table illustrates the dilution in the net tangible book
value per share to new investors:
<TABLE>
<S> <C> <C>
Public offering price per share of Common Stock............................ $ 35.00
Net tangible deficit per share of Common Stock at June 30, 1997.......... $ 0.26
Increase in net tangible book value per share of Common Stock
attributable to new investors.......................................... 2.69
---------
Net tangible book value per share of Common Stock after the
Offering (1).............................................................. 2.43
---------
Dilution per share to new investors........................................ $ 32.57
---------
---------
</TABLE>
- - ------------------------
(1) If the Underwriters' over-allotment option is exercised in full, the net
tangible book value would be approximately $2.91 per share, resulting in
dilution to new investors in this Offering of $32.09 per share.
14
<PAGE>
PRINCIPAL AND SELLING STOCKHOLDERS
The table below sets forth the number and percentage of outstanding shares
of Common Stock that will be beneficially owned by (i) each director of the
Company, (ii) each executive officer, (iii) all directors and executive officers
of the Company as a group, (iv) each person known by the Company to own
beneficially more than 5% of the Common Stock and (v) Selling Stockholders. The
Company believes that each individual or entity named has sole investment and
voting power with respect to shares of Common Stock indicated as beneficially
owned by them, except as otherwise noted.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP OF COMMON BENEFICIAL OWNERSHIP OF COMMON
STOCK PRIOR TO THE OFFERING STOCK AFTER THE OFFERING
------------------------------ ------------------------------
PERCENT OF SHARES PERCENT OF
NAME OF BENEFICIAL OWNER NUMBER OF SHARES CLASS BEING OFFERED NUMBER OF SHARES CLASS
- - ---------------------------------------- ---------------- ------------ -------------- ---------------- ------------
<S> <C> <C> <C> <C> <C>
Daniel L. Simon ........................ 8,435,530(1) 32.3% -- 8,383,530 29.6%
311 S. Wacker Drive, Suite 6400
Chicago, Illinois 60606
Brian T. Clingen ....................... 1,279,938(2) 5.2 -- 1,279,938 4.8
311 S. Wacker Drive, Suite 6400
Chicago, Illinois 60606
Paul G. Simon .......................... 106,852(3) --(4) 52,000 54,852 --(4)
311 S. Wacker Drive, Suite 6400
Chicago, Illinois 60606
Michael J. Roche ....................... 2,000 --(4) 2,000 --(4)
333 Beverly Road, E5-312A
Hoffman Estates, Illinois 60179
Michael B. Goldberg (5)(7) ............. 3,055,110 12.7 46,960 8,500(11) --(4)
Director
Frank K. Bynum, Jr. (5)(7) ............. 3,040,338 12.6(4) 10,688 30,000(11) --(4)
Director
Kelso Investment Associates V, L.P. 2,847,871 11.8 2,847,871 -- --
("KIA V") (5)(6).......................
Kelso Equity Partners V, L.P. ("KEP 151,779 --(4) 151,779 -- --
V")(5)(6)..............................
Joseph S. Schuchert (5)(7).............. 2,999,650 12.4 --(11) --
Frank T. Nickell (5)(7)................. 3,134,879 13.0 135,229 --(11) --
George E. Matelich (5)(7)............... 3,063,293 12.7 3,643 60,000(11) --
Thomas R. Wall, IV (5)(7)............... 3,103,172 12.9 73,522 30,000(11) --(4)
David I. Wahrhaftig (5)(7).............. 3,046,509 12.6 24,859 2,200(11) --(4)
John F. McGillicuddy (9)................ 10,000 --(4) 10,000 -- --
Patricia Hetter Kelso (8)............... 15,000 --(4) 15,000 -- --
George L. Shinn (9)..................... 4,000 --(4) 4,000 -- --
William A. Marquard (9)................. 10,000 --(4) 6,500 3,500 --
Michael B. Lazar (5).................... 6,120 --(4) 3,120 3,000 --(4)
Frank J. Loverro (5).................... 8,724 --(4) 5,724 3,000 --(4)
All directors and executive officers as
a group (6 persons) ................... 8,533,408(10) 32.1
</TABLE>
- - ------------------------
(1) Daniel L. Simon's beneficial ownership includes 4,933,220 shares that he
owns directly, 32,520 shares held by the Simon Family Foundation of which he
is a director, 88,000 shares held by The Simon Family Limited Partnership of
which he is a general partner, 1,995,000 shares issuable to him upon
exercise of the Management Warrants, 928,860 shares over which he has voting
control
15
<PAGE>
pursuant to certain voting trust agreements with Brian T. Clingen and Paul
G. Simon, and 457,930 shares issuable to Brian T. Clingen and Paul G. Simon
upon exercise of the Management Warrants over which Daniel L. Simon has
voting control pursuant to certain voting trust agreements. This total does
not reflect 17,678 shares subject to Management Warrants which Paul G. Simon
will surrender in lieu of paying the cash exercise price of his Management
Warrants.
(2) Brian T. Clingen owns 767,852 shares directly, 35,000 shares held by The
Clingen Family Foundation of which he is a director, 352,078 shares issuable
to him upon exercise of the Management Warrants, and 125,008 shares held by
The Clingen Family Limited Partnership of which he is a general partner. The
voting rights for such shares have been granted to Daniel L. Simon pursuant
to a voting trust agreement.
(3) Paul G. Simon owns 1,000 shares directly and will own 105,852 shares upon
exercise of the Management Warrants prior to the closing of the Offering and
which collectively represent less than 1% of the Common Stock, the voting
rights of which have been granted to Daniel L. Simon pursuant to a voting
trust agreement. This total does not reflect 17,678 shares subject to
Management Warrants which Paul G. Simon will surrender in lieu of paying the
cash exercise price of his Management Warrants.
(4) Represents less than 1% of the Common Stock.
(5) The business address for such person(s) is c/o Kelso & Company, 320 Park
Avenue, 24th Floor, New York, New York 10022.
(6) KIA V and KEP V due to their common control, could be deemed to
beneficially own each other's shares, but each disclaims such beneficial
ownership.
(7) Messrs. Schuchert, Nickell, Matelich, Goldberg, Wall, Bynum and Wahrhaftig
may be deemed to share beneficial ownership of shares of Common Stock owned
of record by KIA V and KEP V, by virtue of their status as general partners
of the general partner of KIA V and as general partners of KEP V. Messrs.
Schuchert, Nickell, Matelich, Goldberg, Wall, Bynum and Wahrhaftig share
investment and voting power with respect to securities owned by KIA V and
KEP V, but disclaim beneficial ownership of such securities. Mr. Goldberg
has been a director of the Company since April 1996 and has informed the
Company that he intends to resign as a director upon consummation of the
Offering. Mr. Bynum became a director of the Company following consummation
of the Company's initial public offering.
(8) Patricia Kelso is the widow of one of the founders of Kelso & Company.
(9) Messrs. McGillicuddy, Shinn and Marquard are outside directors of Kelso &
Company.
(10) Excludes KIA V and KEP V shares as well as shares that may be deemed to be
beneficially owned by Messrs. Schuchert, Nickell, Matelich, Goldberg, Wall,
Bynum and Wahrhaftig.
(11) Because neither KIA V or KEP V will be the owner of record of any shares of
Common Stock of the Company after the completion of the Offering, none of
Messrs. Schuchert, Nickell, Goldberg, Wall, Bynum and Wahrhaftig will be
deemed to beneficially own such Common Stock solely by virtue of their
status as general partners of the general partner of KIA V and/or the
general partners of KEP V.
16
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE
No prediction can be made as to the effect, if any, that market sales of
shares of Common Stock or the availability of shares of Common Stock for sale
will have on the market price prevailing from time to time. Nevertheless, sales
of substantial amounts of Common Stock of the Company in the public market after
the restrictions described below lapse could adversely affect the prevailing
market price of the Common Stock and the ability of the Company to raise equity
capital in the future.
Upon completion of the Offering, the Company will have outstanding
26,327,757 shares of Common Stock (excluding 2,734,278 shares of Common Stock
issuable pursuant to the 1996 Warrant Plan and Noteholder Warrants). See
"Capitalization" and "Description of Capital Stock." Of these shares, 16,351,905
shares of Common Stock are freely tradable without restriction under the
Securities Act except for any shares purchased by "affiliates," as that term is
defined in the Securities Act, of the Company. The remaining shares are
"restricted securities" within the meaning of Rule 144 adopted under the
Securities Act (the "Restricted Shares"). The Restricted Shares generally may
not be sold unless they are registered under the Securities Act or are sold
pursuant to an exemption from registration, such as the exemption provided by
Rule 144 or Rule 144A under the Securities Act.
Certain of the Company's security holders and all of its executive officers
and directors have the power to dispose of approximately 8.4 million shares
(including 2,347,078 shares issuable upon exercise of the Management Warrants).
These shares will not be eligible for sale in the public market without
registration unless such sales meet the conditions and restrictions of Rule 144
as described below.
In general, under Rule 144 as currently in effect, any person (or persons
whose shares are aggregated), including an affiliate, who has beneficially owned
shares for a period of at least one year (as computed under Rule 144) is
entitled to sell, within any three-month period, a number of shares that does
not exceed the greater of (i) 1% of the then-outstanding shares of Common Stock
(approximately 263,000 shares as of the date of this Prospectus (including
shares issuable pursuant to the 1996 Warrant Plan and Noteholder Warrants)) and
(ii) the average weekly trading volume in the Company's Common Stock during the
four calendar weeks immediately preceding the date on which the notice of such
sale on Form 144 is filed with the Securities and Exchange Commission (the
"Commission"). Sales under Rule 144 are also subject to certain provisions
relating to notice and manner of sale and the availability of current public
information about the Company. In addition, a person (or persons whose shares
are aggregated) who has not been an affiliate of the Company at any time during
the 90 days immediately preceding a sale, and who has beneficially owned the
shares of at least two years (as computed under Rule 144), would be entitled to
sell such shares under Rule 144(k) without regard to the volume limitation and
other conditions described above. The foregoing summary of Rule 144 is not
intended to be a complete description thereof.
17
<PAGE>
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement among the
Company, the Selling Stockholders and the Underwriters named below (the
"Underwriting Agreement"), Alex. Brown & Sons Incorporated, Bear, Stearns & Co.
Inc. and Donaldson, Lufkin & Jenrette Securities Corporation (the
"Underwriters") have severally agreed to purchase from the Company and the
Selling Stockholders, the following respective number of shares of Common Stock
at the public offering price less the underwriting discounts and commissions set
forth on the cover page of the Prospectus:
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER SHARES
- - ----------------------------------------------------------------------------------------------------- -----------
<S> <C>
Alex. Brown & Sons Incorporated...................................................................... 1,833,334
Bear, Stearns & Co. Inc.............................................................................. 1,833,333
Donaldson, Lufkin & Jenrette Securities Corporation.................................................. 1,833,333
-----------
Total.............................................................................................. 5,500,000
-----------
-----------
</TABLE>
The Underwriting Agreement provides that the obligations of the Underwriters
are subject to certain conditions precedent and that the Underwriters will
purchase all shares of the Common Stock offered hereby if any of such shares are
purchased.
The Company has been advised by the underwriters that they propose to offer
the shares of Common Stock to the public at the public offering price set forth
on the cover page of this Prospectus and to certain dealers at such price less a
concession not in excess of $0.85 per share. The Underwriters may allow, and
such dealers may reallow, a concession not in excess of $0.10 per share to
certain other dealers. After the public offering, the offering price and other
selling terms may be changed by the Underwriters.
The Company, Daniel L. Simon and Brian T. Clingen have granted to the
Underwriters options, exercisable not later than 30 days after the date of this
Prospectus, to purchase up to 412,500, 206,250, and 206,250 additional shares of
Common Stock, respectively, at the public offering price less the underwriting
discounts and commissions set forth on the cover page of this Prospectus. To the
extent that the Underwriters exercise such option, each of the Underwriters will
have a firm commitment to purchase approximately the same percentage thereof
that the number of shares of Common Stock to be purchased by it shown in the
above table bears to 5,500,000, and the Company will be obligated, pursuant to
the option, to sell such shares to the Underwriters. The Underwriters may
exercise such option only to cover over-allotments made in connection with the
sale of Common Stock offered hereby. If purchased, the Underwriters will offer
such additional shares on the same terms as those on which the 5,500,000 shares
are being offered.
To facilitate the Offering, the Underwriters may engage in transactions that
stabilize, maintain or otherwise affect the market price of the Common Stock.
Specifically, the Underwriters may over-allot shares of the Common Stock in
connection with the Offering, thereby creating a short position in the
Underwriters' account. Additionally, to cover such over-allotments or to
stabilize the market price of the Common Stock, the Underwriters may bid for,
and purchase, shares of the Common Stock at a level above that which might
otherwise prevail in the open market. The Underwriters are not required to
engage in these activities, and, if commenced, any such activities may be
discontinued at any time. The Underwriters also may reclaim selling concessions
allowed to an Underwriter or dealer, if the Underwriters repurchase shares
distributed by that Underwriter or dealer.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act.
Stockholders of the Company, holding approximately 8.4 million shares of
Common Stock have agreed not to offer, sell or otherwise dispose of any of such
Common Stock until approximately 90 days
18
<PAGE>
following the date of this Prospectus without the prior consent of the
Underwriters. Consent to sales within the periods referred to in this paragraph
may be provided without prior notice to holders of the Common Stock or to the
markets where such securities are traded. See "Shares Eligible for Future Sale."
The Underwriters have in the past provided and may continue to provide
investment banking services to the Company and Kelso & Company, L.P. and its
affiliates, including in connection with the future acquisitions.
CERTAIN LEGAL MATTERS
The validity of the issuance of the shares of Common Stock offered hereby
will be passed upon for the Company by Winston & Strawn, Chicago, Illinois.
Attorneys employed by Winston & Strawn participating in the representation of
the Company in this Offering own an aggregate of 3,800 shares of Common Stock.
Skadden, Arps, Slate, Meagher & Flom LLP, New York, New York will pass on
certain legal matters for the Underwriters in connection with this Offering.
Skadden, Arps, Slate, Meagher & Flom LLP has from time to time represented Kelso
& Company, L.P., KIA V and KEP V, including with respect to the purchase by KIA
V and KEP V from the Company of Class B Common Stock and Class C Common Stock of
the Company in April 1996, and may continue to represent Kelso & Company, L.P.,
KIA V and KEP V. Skadden, Arps, Slate, Meagher & Flom LLP has been engaged by
the Company to represent it in connection with the certain acquisition
transactions.
EXPERTS
The financial statements incorporated in this Prospectus by reference to the
Annual Report on Form 10-K of Universal Outdoor Holdings, Inc. for the year
ended December 31, 1996 and the audited historical financial statements of (i)
Universal Outdoor Holdings, Inc. included as Exhibit 99.2, (ii) the Statement of
Revenues and Direct Expenses of Ad-Sign for the year ended December 31, 1995
included as Exhibit 99.4 and (iii) the Financial Statements of POA Acquisition
Corporation as of September 30, 1996 and December 31, 1995 and 1994 and for the
nine month period ended September 30, 1996 and for each of the two years in the
period ended December 31, 1995 included as Exhibit 99.5, of Universal Outdoor
Holdings, Inc. Form 8-K dated July 31, 1997 have been so incorporated in
reliance on the reports of Price Waterhouse LLP, independent accountants, given
on the authority of said firm as experts in auditing and accounting.
The Consolidated Financial Statements of NOA Holding Company as of May 31,
1995 and 1994, and for each of the three years in the period ended May 31, 1995,
incorporated in this Prospectus by reference to Universal Outdoor Holdings, Inc.
Report on Form 8-K filed on July 31, 1997 (File No. 000-20823) have been audited
by Ernst & Young LLP, independent auditors, as set forth in their report, which
is incorporated herein by reference, and have been so incorporated in reliance
upon such report given upon the authority of such firm as experts in accounting
and auditing.
The Consolidated Financial Statements of Revere Holding Corp. and its
subsidiaries as of December 31, 1995 incorporated in this Prospectus by
reference to Universal Outdoor Holdings, Inc. Report on Form 8-K filed on July
31, 1997 (File No. 000-20823) have been audited by Arthur Andersen LLP,
independent public accountants, as stated in their report, which is incorporated
herein by reference, and have been so incorporated in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
19
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the reporting requirements of the Securities
Exchange Act of 1934 (the "Exchange Act"), and, in accordance therewith, files
periodic reports and other information with the Commission. The Company has
filed with the Commission a Registration Statement (which term shall include all
amendments thereto) under the Securities Act, with respect to the Securities
offered hereby. This Prospectus, which constitutes a part of the Registration
Statement, does not contain all of the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the Commission. Statements contained in this Prospectus as to the
contents of any contract, agreement or other document referred to herein are not
necessarily complete.
With respect to each report or other information filed with the Commission
pursuant to the Exchange Act, and such contract, agreement or document filed as
an exhibit to the Registration Statement, reference is made to such exhibit for
a more complete description, and each such statement is deemed to be qualified
in all respects by such reference. The Registration Statement and reports and
other information filed by the Company may be inspected, without charge, at the
offices of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 and
at its regional offices at Seven World Trade Center, New York, New York 10048,
and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
materials may be obtained at prescribed rates from the Public Reference Section
of the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549.
The Commission maintains a World Wide Web site that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission and the address of such site is
http://www.sec.gov.
The Common Stock of the Company is quoted on the Nasdaq National Market.
Reports, proxy and other information concerning the Company can be inspected at
the Nasdaq National Market.
The Company distributes to the holders of its shares of Common Stock annual
reports containing consolidated financial statements audited by an independent
accountant.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents or information filed by the Company with the
Commission are incorporated in this Prospectus by reference and made a part
hereof: (i) Annual Report on Form 10-K for the year ended December 31, 1996
(File No. 000-20823); (ii) Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1997 and June 30, 1997 (File No. 000-20823); (iii) the Proxy Statement
for the 1997 Annual Meeting of Stockholders (File No. 000-20823); (iv) Reports
on Form 8-K filed February 18, 1997 and July 31, 1997 (File No. 000-20823); and
(v) the description of common stock contained in the Registration Statement on
Form 8-A filed on June 6, 1996 and amended by Amendment No. 1 on July 17, 1996.
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date hereof and
prior to the termination of the Offering shall hereby be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, on the written or oral request of any such person,
a copy of any and all of the documents incorporated herein by reference (other
than exhibits not specifically incorporated herein by reference). Requests for
such copies should be directed to Paul Simon, Universal Outdoor Holdings, Inc.,
311 S. Wacker, Suite 6400, Chicago, Illinois 60606, telephone number (312)
431-0822.
20
<PAGE>
THE ART OF
ADVERTISING
IS UNIVERSAL
[PICTURE OF BILLBOARD]
[PICTURE OF BILLBOARD]
[PICTURE OF BILLBOARD]
[UNIVERSAL OUTDOOR LOGO]
<PAGE>
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NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THE OFFERING MADE HEREBY TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER
TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY PERSON OR BY ANYONE IN ANY
JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.
--------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Prospectus Summary............................. 3
Risk Factors................................... 9
Use of Proceeds................................ 13
Capitalization................................. 13
Dilution....................................... 14
Principal and Selling Stockholders............. 15
Shares Eligible for Future Sale................ 17
Underwriting................................... 18
Certain Legal Matters.......................... 19
Experts........................................ 19
Available Information.......................... 20
Incorporation of Certain Information by
Reference..................................... 20
</TABLE>
5,500,000 SHARES
[LOGO]
UNIVERSAL OUTDOOR
HOLDINGS, INC.
COMMON STOCK
------------
PROSPECTUS
------------
ALEX. BROWN & SONS
INCORPORATED
BEAR, STEARNS & CO. INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
August 15, 1997
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