Boston Omaha Corp (BOC)

A. Company Overview

Boston Omaha Corporation, commonly referred to as Boston Omaha or the Company, is a diversified holding company that commenced operations in June 2015. It operates through four primary lines of business: outdoor billboard advertising, broadband services, surety insurance and related brokerage activities, and asset management. In addition to these core sectors, Boston Omaha holds minority investments in various industries, including commercial real estate management, a bank servicing the automotive loan market, a broadband service provider, and a developer of private aviation infrastructure.

Headquartered in Omaha, Nebraska, the Company has grown rapidly through acquisitions since its inception, positioning itself as a significant player in outdoor advertising and broadband services, while also establishing a foothold in the insurance market.

B. Business Segments

Outdoor Billboard Advertising

Boston Omaha entered the outdoor billboard advertising sector in 2015 via acquisitions made through its wholly-owned subsidiary, Link Media Holdings, LLC (Link). The initial strategy involved acquiring smaller billboard companies in the Southeast United States and Wisconsin. Since then, the Company has expanded substantially, owning approximately 4,000 billboards as of December 31, 2023, which comprise roughly 7,600 advertising faces, including about 90 digital displays.

The Company’s strategy focuses on acquiring additional billboard assets, particularly in markets where competition is lower due to high regulatory barriers and where demand for outdoor advertising remains strong. The advertising contracts are typically short to medium-term, offering a responsive approach to advertisers’ needs. The outdoor advertising market was valued at approximately $6.2 billion in the U.S. in 2022, and Boston Omaha has positioned itself to capture significant market share amid a fragmented competitive landscape.

Surety Insurance

In September 2015, Boston Omaha established General Indemnity Group, LLC (GIG) to manage its surety insurance operations. The Company’s foray into surety insurance included acquiring a surety brokerage in April 2016, followed by the acquisition of United Casualty and Surety Insurance Company (UCS) in December 2016. UCS, initially licensed in nine states, has since expanded to operate across all 50 states and the District of Columbia.

GIG specializes in issuing surety bonds which guarantee the performance of contractual obligations, offering various bond types, including commercial and contract surety bonds. The surety insurance sector is characterized by a complex landscape of regulatory oversight and competition from larger national and international insurers. GIG’s strategy focuses on underwriting strength, risk management, and competitive pricing to capture market opportunities within the $8.6 billion surety market.

Broadband Services

Boston Omaha established a broadband subsidiary in April 2019, now known as Boston Omaha Broadband, LLC (BOB). The broadband segment focuses on providing high-speed internet access to underserved rural communities. Through strategic acquisitions, including significant assets from AireBeam, InfoWest, and Utah Broadband from 2020 to 2023, the Company has built a considerable customer base of approximately 43,000 broadband subscribers.

The demand for broadband service has surged, particularly following the COVID-19 pandemic, as remote work and online connectivity become increasingly critical. Boston Omaha’s broadband services aim to provide fiber-optic connectivity, a technology that offers superior speed and reliability compared to traditional broadband solutions.

Asset Management

The asset management division, Boston Omaha Asset Management, LLC (BOAM), was established in September 2017 with the goal of raising third-party capital to invest in attractive assets and businesses alongside Boston Omaha. BOAM has initiated projects such as the proposed build-for-rent business and has engaged in strategic discussions to secure funding for the expansion of the Company's broadband operations.

In 2023, Boston Omaha acquired full ownership of 24th Street Asset Management LLC, which manages two investment funds oriented towards secured lending and commercial real estate investments. Recently, however, the Company has decided to wind down some of BOAM’s operations, refocusing on managing real estate funds and returning capital to investors.

C. Minority Investments

Since its inception, Boston Omaha has made minority investments in a range of industries, including commercial real estate, automotive loan servicing, and private aviation infrastructure. These investments are part of Boston Omaha’s broader strategy to diversify its holdings beyond its core operating segments.

D. Competitive Landscape

Boston Omaha operates in competitive industries characterized by significant players. In outdoor advertising, three companies dominate—with Clear Channel Outdoor, Outfront Media, and Lamar Advertising Company commanding over 50% of the market. In the surety insurance sector, Boston Omaha competes against established insurers like Travelers, Liberty Mutual, and others, leveraging its strong underwriting practices and regional focus.

In the broadband services arena, competition arises not only from traditional cable operators but also from emerging technologies such as 5G, which may disrupt existing service models. Boston Omaha's strategy includes identifying acquisition targets in fragmented markets, thus allowing for continued growth and market expansion.

E. Growth and Investment Strategy

The overarching strategy for Boston Omaha includes pursuing acquisitions, focusing on companies with demonstrated earnings stability and a strong return on equity. The Company sources acquisition opportunities through a combination of internal research, market intelligence, and brokered introductions, maintaining a disciplined investment approach to manage risks and leverage industry trends.

F. Financials and Capital Management

Boston Omaha has raised significant capital through various means, including public offerings and bank loans. As of the end of 2023, the Company reported approximately $22 million in cash and $18 million in short-term treasury securities. The entities within Boston Omaha utilize a combination of organic growth and acquisition strategies to enhance shareholder value and pursue potential profitable ventures.