Outcast Media has solidified its leadership position in the fast-growing place-based advertising industry today by announcing a formal merger with its year-and-a-half joint venture partner PumpTop TV, and an expansion into the fitness vertical through a merger with Health Club Media Network.
Together, this combined network creates unprecedented scale by reaching on-the-go consumers in more than 5,000 gas stations and close to 4,000 health clubs in 130 U.S. markets.
Parthenon Capital Partners, a growth-oriented private equity firm with $2 billion in management and a current investor in HCMN, will invest new equity capital – amount not released. Ed. – in the combined company to fuel continued growth and expansion. Outcast has also secured bank financing from Silicon Valley Bank. Matthew Stoudt and Nathan Gill will lead the management team as Chief Executive Officer and Chief Revenue Officer, respectively.
Under Outcast Media Holdings Inc., the company will operate two channel networks: Outcast PumpTop TV network and Outcast Health Club Media Network.
“This consolidation represents the natural extension of both companies’ strategy to build a network dedicated to reaching the active, on-the-go consumer, at a point of influence,” says Stoudt. “With the strong support of Parthenon Capital and PumpTop TV’s world-class technology platform, we will be able to rapidly expand our footprint and product offering to better serve our advertisers and venue partners.”
Outcast’s PumpTop TV network reaches active consumers at the pump via 11,000 one-to-one high definition displays. HCMN, which will be run as a division of Outcast, reaches active consumers inside almost 4,000 health clubs through a combination of high definition digital and static displays.
Stoudt says that the two channels will each continue to operate with their own sales forces, and each will carry on with their own programming for the time being.
“Our mission has always been to get into verticals and this makes sense,” says Stoudt. “It’s not a big jump for us. Stats on fitness clubs show that 60% of fitness club members go elsewhere rather than home or work when they leave the clubs, so this is a very interesting opportunity and broadens our offering for advertisers.”
The HCMN screens are usually about 40% advertising and 60% content mainly relating to club information. They are backed by X2O’s management software. PumpTop TV has its own software on the other hand, and Outcast uses Scala so there’s likely to be some changes or integration forthcoming.
“We will migrate to a unified platform if it makes sense,” says Stoudt, “Whatever we do in that regard won’t matter to consumers, It’s all back end, and they’re all good and flexible.”
Stoudt also mentioned that the company is looking into the use of mobile with its products.
“In today’s rapid-fire, highly cluttered world, advertisers must rethink the ways to reach and influence active consumers who lead busy and distracted lives,” says Gill. “Our consolidated network provides a national footprint for advertisers with the unmatched ability to connect with young and affluent consumers on the path to purchase.”
Jon Grad, a partner at Parthenon Capital Partners says, “We believe that the combination of these great networks will create a true industry leader in the digital out-of-home market.”
Outcast is believed to own about 60% of the digital screen market at gas pumps across the U.S..
About Outcast Media Holdings, Inc.
Outcast Media Holdings, Inc. is a digital media company reaching active, on-the-go consumers. The company consists of two channels: PumpTop TV and Health Club Media Network. Advertisers reach a Nielsen audited combined audience of more than 68 million active consumers each month at health clubs and gas stations in 120 DMAs. The company is privately held and is headquartered in Santa Monica, California, with offices in New York City and Chicago.
About Parthenon Capital Partners
Parthenon Capital Partners is a leading mid-market private equity firm based in Boston and San Francisco. Parthenon utilizes niche industry expertise and a deep execution team to invest in growth companies in service industries. Parthenon seeks to be an active and aligned partner to management.