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M&A List: Digital Signage Mergers, Acquisitions and Bankruptcies

Author: Bill Gerba on 2010-04-28 15:39:28

About 18 months ago, just as the true scope of the economic crisis was becoming known, many in our industry wondered how a global downturn would impact the adoption, acceptance and growth of digital signage and related technologies. Many predicted a near-catastrophic decrease in demand. Others (and oddly, most of the "research" companies) renewed their expectations for hyperbolic, high double-digit growth. I think most of us expected a decrease in demand that might slow growth, but couldn't possibly stop it entirely. But one thing seemed certain: any sudden change in the economy would probably signal a new wave of mergers and acquisitions that would bring some much-needed consolidation to our industry ecosystem. Eighteen months later, has that prediction come true? Let's take a look at the data.

To merge, or not to merge?

  Before we get into who's been doing the buying, selling and folding, I'd like to pause for a brief history lesson. Back in the dot.com heyday of the late 1990s, companies with no customers, products and revenues to speak of were merging left, right and center out of fear. At least, that's what it looked like to the casual observer. Many dot.com execs believed that passing up an opportunity for growth through acquisitions would lead to certain death by asphyxiation, as they'd be squashed between newly-merged megacompetitors and a drove of upstart startups plotting from their dorm rooms. But as the bubble peaked in early 2000 and the recession of 2001 took hold, we witnessed a new kind of tech-driven M&A strategy: the roll-up. A roll-up is simply when an acquirer (who might be a cash-rich company, a holding company, or an institutional investor) buys up a bunch of competitors in a market with the goal of achieving economies of scale. In other words, they keep all of the acquired companies' revenue sources (i.e. customers) while reducing operating expenses. Unfortunately, a lot of these deals turned out badly, as overeager M&A firms suddenly discovered just why so many companies had no products, customers or revenues to speak of in the first place.

Fast forward to today. While the digital signage industry is nowhere near as large or overinflated as the dot.com guys were a decade ago, we do face many of the same problems as our tech brethren did. At present, we have a large pool of vendors serving a fairly small pool of clients. Because of this, many try to "create" demand by hyping the industry and making impossible claims. Despite the existence of four not-for-profit groups that serve our industry, we still have significant problems with basic items like terminology, cost/benefit analysis and technical standards. Meanwhile, many of the A-list networks in the space routinely have revenue problems, punctuated by layoffs and new rounds of investment just to keep the lights on. On both the vendor and network side, far too many companies are too reliant on equity investments to stay afloat, let alone thrive. Heck, some of the biggest names in our industry have found themselves scrambling for cash in the past year or so.

What sort of mergers, acquisitions and bankruptcies have we seen lately?

In a quick and totally non-exhaustive search, I came up with a list of 41 merger, acquisition and/or bankruptcy events that have taken place since August 2008, which is roughly when the true effects of the global recession became noticeable. (Special thanks to Adrian Cotterill for his help -- this research would have been a lot harder without the DailyDOOH archives.) I know there are others beyond what I've included in the list, because I left out several deals in China, Japan and Taiwan that I'm aware of, and that's just for starters. Regardless, I think we can all agree that 40-or-so deals in an 18-20 month time frame is pretty significant in an industry where a six-figure customer contract is still considered "huge." So without further commotion, here's my list of acquisitions, mergers and bankruptcies that have taken place since August 2008, presented in alphabetical order:
  • 42Media Group goes bankrupt
  • Access 360 Media purchase Arena Media
  • Ad-Dispatch acquires Volt Media
  • AdWalker goes bankrupt
  • Artexe SRL acquires Emmerrelogic SRL, becomes DOOH.IT
  • Avanti Screenmedia goes bankrupt
  • Bally Technologies acquires Coolsign's gaming division
  • ClearOne acquires NetStreams (and just received its NASDAQ delisting notification)
  • Core Technology merges with Studio 911
  • Danoo acquires IdeaCast
  • Digiadvans acquires Mobile Eco Ads
  • Digital Poster AS goes bankrupt
  • EDR Media acquires The Golf Network, becomes Sports Retail Networks LLC
  • Fujitsu acquire global rights to TELentice (after bankruptcy)
  • JCDecaux acquires assets of Titan Outdoor UK
  • Kaleidovision acquires Music Concierge
  • Litelogic goes bankrupt
  • Medscreen goes bankrupt
  • Mermaid acquires Media Solutions AB
  • Millennial Media acquire TapMetrics
  • Minicom Digital Signage spins out from Minicom
  • Mood Media acquires Music Matic
  • Muzak goes bankrupt
  • National CineMedia makes strategic investment in Danoo (now RMG Networks)
  • NCR acquires NetKey
  • NetKey acquires Webpavement
  • Pixman Nomadic Media goes bankrupt
  • PlayNetwork acquires Channel M
  • Primesight acquires Titan Outdoor's UK roadside business
  • Redbus Group acquire assets of Streetbroadcast
  • RMG Networks acquires Pharmacy TV
  • Screenred disappears (and presumably goes bankrupt)
  • SMART acquires NextWindow
  • Sony acquires Convergent
  • TargetCast buys Ripple Networks
  • Touchtunes acquires Barfly
  • Verifone acquires Clear Channel Taxi Media
  • Vision Media Group goes bankrupt
  • Visser Digital Media acquires CampusLink and LevelVision College
  • WSJ/KPCB make strategic investment in TargetCast
  • Zoom Media & Marketing acquires Sports Display, ClubCom, GymTV, Allied Media's nightlife network and Wellness Health Education Network
For many, being on this list isn't exactly a good thing. In fact, more than half of the companies listed were acquired out of necessity, or simply went out of business. Yes, there were a few bright spots. Zoom Media & Marketing, for example, has been clearly and aggressively pursuing growth through acquisitions. Others, like National CineMedia, used their strong balance sheets to make forays into strategically valuable markets on the cheap. But most, sadly, were either reorganized, acquired, or simply imploded due to insufficient cash reserves, poor planning, skittish financial backers, or some combination of the three.

Whereas the roll-up strategy was pretty ineffective after the dot.com implosion, it could do somewhat better in the DOOH marketplace. The most obvious case would be when network owners (like Zoom Media) expand by acquiring venues and screen real estate for far less than the cost of buildout. But even tech vendors stand to gain. Netkey, for example, had been strong in the interactive kiosk market for over a decade, but had very little presence in digital signage. An inexpensive purchase of Webpavement, who was rumored to be foundering at the time, solved that problem. More importantly, it gave them a more complete slate of offerings, which ultimately contributed to them getting acquired by NCR.

Where will the next batch of M&A activity come from?

The deals listed above, along with the others I've missed, have brought some much-needed consolidation to our space. But I don't think we're done yet. I expect the frequency of deals to decline a bit in the coming months, but I believe we'll still hear about a few big surprises before the year is out. Stratacache is still sitting on most if not all of its $25M strategic investment fund. Navori has been making noise about expanding (through acquisitions) into the US market. And, as Adrian likes to remind us of frequently, PRN is going to be bought by someone, and that someone is suddenly going to inherit one of the largest DOOH meta-networks on Earth.

Lower costs, better acceptance, and a re-centering of expectations will drive more money into digital signage in the next 18-24 months. Combined with the re-emergence of venture capital and private equity funds -- who had all but disappeared from my radar up until about a month ago -- the revitalization of the global economy should bring with it a new wave of organic and transactional growth in the digital signage market.

Did I leave out any notable transactions from the list? If you know of any that I missed, please leave a comment below. With your help, we can turn this page into the most comprehensive M&A list for the industry.

Comments (25)

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2010-04-28Adrian Cotterill writes:
Great post Bill (as usual). We expect Zoom Media & Marketing to continue its acquisition spree - they have something fairly big in the offing atm we believe.

Danoo will IPO in next 12 months which should be a bright spot in the market.

PRN will be acquired by a private equity company for anywhere between USD 10M and 100M depending on how gullible the P/E folks are

When PlayNetwork finally figure out what they did wrong by acquiring Channel M they may too re-enter the acquisition space (perhaps in Europe where they are needed most)

RAM Vision in the UK may also start some consolidation in the UK also

CAN Media bought a few companies in the UK in your timeframe but have typically grown by being a great company with solid profits and good people

BTW we think Sony bought convergent media systems primarily to get into or be better at the digital cinema space.

Finally watch out too for a couple of USD 100M turnover businesses we are working for (in North America) who are seriously looking at spending big in getting into this space
2010-04-28Lionel Tepper writes:
Excellent post, however a couple of points should be clarified:

1) Muzak has emerged from bankruptcy and is doing well.

2) NetKey acquired Webpavement about 2 years ago. NCR then bought Netkey at the end of 2009.

3) Last I heard the purchase of Arena Media's assets by Access 360 Media is only a rumor, nothing official has been announced.

There have been many small out-of-home networks that have gone dark that most people don't know anything about. We know about them because we track companies through the maintenance of our Directory. Usually the last thing that happens when a company closes their doors is the pulling of the plug on the company's Website. We know of about 18 networks here in the US that have shut down.
Considering everything that has happened in the world things could have been much worse.
2010-04-28Adrian Cotterill writes:
We have the court document filed in NYC stating that the assets of Arena Media were bought by Access 360 - whilst Access 360 may not want to announce anything the documents are public domain for all to see

http://www.dailydooh.com/archives/25299
2010-04-28Social comments and analytics for this post writes:
...This post was mentioned on Twitter by billgerba: *Someone's* doing biz in the digital signage industry: M&A List: Digital Signage Mergers, Acquisitions and Bankruptcies http://bit.ly/drGrDG...
2010-04-28Mariam Ispahani writes:
Bill - thanks a ton for this! So, you think the VCs are back in the game? I noticed they don't care for digital signage and are more interested in mobile applications, especially iPhone apps.

-m-
2010-04-28Anonymous writes:
Reactrix....bankrupt (summer of 08?).
And NEO pulled out of US?
2010-04-29Denis/Ooh-tv writes:
Hi Bill,
Great post. I would add VisionChina Media's acquisition of Digital Media Group ($160M)

And Music Matic hasn't been acquired by Mood Media.
2010-04-29Lee Arthur writes:
This is a good article, well done.

I was the founder & CEO of Streetbroadcast, mentioned above as being sold to Redbus.

Further consolidation is required to allow digital out of home to grow. Its potential is great and it is an industry filled with skilled people, passionate about their work.

My view of the issues are that digital signage, funded by advertising, is hampered by the market structure of outdoor buying, at least in the UK. Two buying groups(Kinetic and Posterscope) control over 90% of all purchasing. Three Media Owners receive 85% of all outdoor spend. So the market for outdoor advertising is shaped and controlled by the strategy of five companies whose profitability and interests are closely aligned. This level of consolidation in any industry stifles growth. Read this to understand why and how http://goo.gl/q8HC

Good technology is not enough. Good locations and content not enough. Good sales teams and a well funded business is not enough. There are exceptions of course, when a company creates a very unique niche, such as Ocean Outdoor for example.

In this industry, an offering requires real scale or a real point of difference (and a technological feature is not one) Scale is capital intensive and takes time to build. If one does not reach a scale tipping point quickly enough, someone else takes the business from you, as cash or effort drys up, and then captures all the value you created (Redbus/Streetbroadcast is a perfect example of this).

Before leaving Streetbroadcast, I with my Chairman, recommended a strategy of consolidation and acquisition to my Board which was rejected. I still believe this is the only way to go for this industry to gain some real traction. Success will have to be driven by a very large player or an ambitious role up strategy put together by an independent venture capital/private equity company, to bring all the smaller players under one roof.

Beware the rules that define market profits, they are rarely broken.
2010-04-29Christie Liu writes:
It was announced on April 14th, 2010 that NYC-based Interactivation purchased NBC's Patient and Newborn Channel Networks. CEO Joe Covey will be a speaker at this year's 5th Annual Digital Signage Investor Conference, scheduled for October 5th and 6th in NYC.

In April 2009 Cineplex Media purchased Onsite Network (stadium network and 23 office skyscrapers), a deal valued around $1.7 million.

October 2008 Fuelcast merged with Bhootan and rebranded to Outcast.

Here's a sneak peek at some of the speakers at this years investor conference:

Philip Cohen, President & CEO, CARE Media Holdings Corp.
Garry McGuire, CEO, RMG Networks
Robert Wolf, CEO, InStore Broadcasting Network
Alan High, President, Clear Channel Malls
Matthew Stoudt, CEO, Outcast
Gadi Tiroshi, General Partner, Jerusalem Venture Partners (JVP)
David Ingraham, VP, M/C Venture
Ronni Guggenheim, CEO, Minicom Digital Signage
Noam Levavi, President & CEO, YCD Multimedia
Jill Nickerson, VP, Director of OOH, Horizon Media
Connie Garrido, CEO, Posterscope USA

We're definitely looking forward to the discussions/news/deals that will emerge from this forum...all the shakers and movers in one room!
2010-04-29Gail Chiasson writes:
Really interesting article, Bill. A keeper.

Somewhere along the line, Sidetrack Technologies seems to also have disappeared. Although Basset Media Corp. Group was supposed to be acquiring it, the company won't talk about same, leaving us to wonder if there was too great a debt load to bother taking it on or whether it's still in the works as Basset claimed last fall. At that time Basset had also signed a letter of intent with respect to the proposed acquisition of all outstanding shares of Haizou Media Corporation, China.
2010-04-29Bill Gerba writes:
Great comments, all.

I think I'm going to do a brief update to the post to include the M&A activity that I missed (plus the Scala/Signchannel announcement from today), and also to clarify that "going into bankruptcy" does NOT mean "going out of business forever"
2010-04-29Dave Haar writes:
Excellent article Bill. It ws nice to see the spin off of a 20 year old company be one of the highlights of the industry. We have some very exciting and paradigm changing news as we start out with the first product announcement from Minicom Digital Signage, Ltd at Screen Media next week. Minicom Digital Signage Reveals Remote Device Management (RDM) Technology for Digital Signage Displays at Screen Media Expo 2010 - http://minicom.blogspot.com/2010/04/minicom-digital-signage-reveals-remote.html.
2010-04-30Matthias Wagner writes:
to make that clear: 42media is not bankrupt and continues business!

have a nice day :)
2010-04-30David Titchenal writes:
I ahve enjoyed reading all the comments and Bill's article. It would seem that change is still the constant in the universe.
2010-05-06Yashod Bhardwaj writes:
Very helpful article Bill….!

I would like to mention the names of few other Venture Capital firms that have been looking for successful Digital Signage companies at The Digital Signage Investor Conference held annually in New York City (listed alphabetically):

3i Group
ABS Capital Partners
Adams Street Partners, LLC
Avista Capital Holdings
Bain Capital
BIA Digital Partners
Boston Ventures
Carmel Ventures
Challenger Capital Group Ltd.
GE Capital
Halyard Capital
Highland Capital Partners
Intel Capital
Interact Venture Fund, Inc.
Investor Growth Capital, Inc

For a detailed list, please visit: http://bit.ly/awHKEs
2010-07-12Greg Keane writes:
Where can I buy some of the assets of these companies...is there a place I can find digitalsignage liquidation?
2010-08-12digital signage saas writes:
Enjoyable article to read but I think mergers are a last resort. I thought the digital signage business, especially digital signage saas was doing well. Enjoyable article to read.
2010-08-17digital signage saas writes:
Enjoyable article to read but I think mergers are a last resort. I thought the digital signage business, especially digital signage saas was doing well. Enjoyable article to read.
2010-08-22anwar writes:
hi guys,
your help will be highly appreciated if you can direct me how can i get access to accounting ratios of merged and acquired firms free of charge as i am student and cant afford high charges.
thanks
2010-08-22anwar writes:
hi guys,
your help will be highly appreciated if you can direct me how can i get access to accounting ratios of merged and acquired firms free of charge as i am student and cant afford high charges.
thanks
2010-10-09Peter Dombrowski writes:
The news from 42media group. His ist still alive, but the end in near. The CEO and the CMO leave the board. The rest is history.
2011-11-16Bill Gerba writes:
Some 2011 updates:

MRI (Grant Sign Group) aquires Hamilton Digital Designs
Chilin Technology acquires Vertigo Digital Displays
CoolSign bought by Haivision
iSIGN Media acquires Pinpoint Media
VITEC Multimedia acquires assets of OOH Video
Delphi Display Systems acquires Fast Track
Texas Digital bought by Radiant Systems
Ströer Digital Acquires ECE flatmedia
Brite Media Group acquires Targetcast
VeriFone acquires assets of Show Media
VeriFone acquires TaxiMedia
Mirane bought by MEDIC Holdings
ClearOne acquires MagicBox
YCD acquires assets of C-Nario
2011-11-16adrian cotterill writes:
Texas Digital (themselves) bought by NCR

Amscreen acquires Digicom

Screenvision Acquires Uniquescreen Media

SeeSaw Networks bought by .... (or do they just go under)

EK3 bought by .... (well we know who they are talking to - does that count?)
2011-11-16André Koitzsch writes:
I miss the EnQii / Minicom Digital Signage story having merged to ComQi.
2011-11-23Bill Gerba writes:
Newad Acquires Media One’s Assets

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