Outcast-PumpTop TV-HCMN Merger

Gail Chiasson, North American Editor

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.

12 Responses to “Outcast-PumpTop TV-HCMN Merger”

  1. Joanie Says:

    Can you please not run these fluff-ball press releases that don’t have metrics, sales volume, client lists, etc. Provide real info about industry leaders or potential leaders. Investment is great, but investment without advertisers and revenue mean this is another non-story in the DOOH space. Outcast has very limited revenue (pennies) and a continuing lawsuit with GSTV, so if they didn’t get funding they would be out of business filing for bankruptcy.

  2. DOOH Observer Says:

    The management for Outcast just squeaked by with this deal. If it hadn’t closed, the doors of Outcast were about to close…

  3. DOOH Observer Says:

    The deal makes them not go into bankruptcy…similar deal Arena Media Networks and A3M. What does this say about the industry…

  4. Anonymous Says:

    A good deal between two recognized companies and proven venue types. Very smart to leave separate sales groups in place, as the consumer and advertising xp is markedly different for each network.
    Neilsen’s Fourth Screen report shows Outcast/Pumptop at 1,226 deployed locations, and this announcement claims 5000. The report shows digital screens in 512 health club venues, and the announcement touts 4,000. The gap between the ‘potential’ of 9000 and the reality of 1,738 is alarming. We need to celebrate factual growth accomplishments, not PR-driven fantasies.

  5. James Says:

    hear-hear, Joanie! I think 2011 will be a great and terrible unveiling for these companies, Access360/Arena, RMG-PRN, et al. The time for smoke and mirrors is long past us.

  6. BS detector Says:

    nielsen measures both video networks, and the current 4th screen report shows these two networks have digital in 1,738 venues combined. So its brilliant to publish that you have screens in 9,000 venues to the press, because that instills confidence and enthusiasm throughout the industry, especially with advertisers.

  7. Anonymous Says:

    They have less than 1800 venues deployed, according to Nielsen, yet claim 9,000. This has to stop.

  8. Anonymous Says:

    agree with the above. can you please show some reference to their actual measurements data as compared to the claims made in this press release and boilerplate? it seems like the formula for ad-supported networks is to multiply the facts by an order of 5-10x and worry about any investigation as it arises. very disturbing, and harmful to the viable companies.

  9. Oscar Says:

    Until the DP-AA gets these companies to stop with the BS press releases, boilerplate, etc., the overall ad industry will continue to see DO companies for what they are…BS. Become a real advocate for the industry and call BS on DO companies that say one thing but are another. The industry needs REAL MEASURABLE METRICS. If you ask media buyers and planners and analysts–they poo-poo it all because BS = poo, if ya’ know what I mean!

  10. AnonymousAgain Says:

    Since when does the ad industry pay based on press release numbers? If a company claims more digital locations for a campaign than it can prove with proper POP reporting and audits, that would be actionable and suicidal, n’est-ce pas?

    And DPAA is not stopping fluff releases, as it’s leadership thrives on them, and it governs nothing.

  11. Anonymous but Accurate Says:

    Having to shmooze and explain to a media buyer why a network’s audience or deployments is only a fraction of what they might have read in the press is pretty easy.
    Leaving the permanent assumption with that media buyer that ALL networks’ numbers are inflated many times over, and thus they will have to work very hard to deliver accurate reporting to their client, is what the real problem is here. They will not make the effort to champion dooh to their clients..
    US ad-supported networks:
    1. Stop lying.
    2. Call BS on those who do, bluntly and privately.
    3. Measure your networks properly.
    4. Only report verifyable, 3rd party measurement data in the press.
    5. Future goals are no longer news for this industry, they never come true. Only tout verifyable accomplishments.

  12. Gassy Says:

    At what point do the media agencies start to flex some muscle instead of sticking their head in the sand in these matters? I don’t mean press releases and investments, that is not their business. I mean they don’t seem to care who really has what; to them, it is all the same; all the vendors just offer up commodities that are all the same in their eyes. Their poorly trained brains are not taught to scrutinize lists or separate one operator from another. Truth be told, they are encouraged not to separate one operator from another because they think the client does not want to know the details.

    The day a media agency says to a company like Pump TV/HCMN: “look, you’re blowing smoke up our ass, and your bullshit numbers have earned you a place on our blacklist. You are not as good as Company X and we know it. Clean up your act, commission an audit, then we’ll talk” is the day I have faith in them.

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