CBS buys SignStorey for $71.5 million (and I am not making this up)

Two words: Holy crap!

This came across the press release wires today:

CBS Corporation announced today that it has entered into a definitive agreement to acquire SignStorey, Inc., a leader in the distribution of video programming and advertising content to retail stores.

The purchase price is $71.5 million in cash. SignStorey will be renamed “CBS Outernet” upon closing of the deal and is expected in the fourth quarter of 2007, pending regulatory review.

With digital video displays in more than 1,400 grocery stores in major markets across the United States, SignStorey offers advertisers the opportunity to reach consumers with targeted content that can be customized by region and by daypart. The company’s satellite-delivery system enables immediate, customized programming and messaging to each individual system.

SignStorey has long-term exclusive contracts with SuperValu (Acme, Albertsons, Jewel and Shaw’s), Pathmark, ShopRite and Price Chopper, among others, and is currently installed in six of the top 10 markets in the U.S., with traffic of more than 72 million consumers every month. The company’s revenues more than doubled year-over-year in 2006, and it has additional contracts and pilot programs in grocery accounts representing thousands of stores across the United States. As CBS Outernet, it will continue to expand its distribution network to other retail locations and shopping environments.

“CBS Outernet will offer our advertisers a tremendous, broad new platform to reach consumers out of their homes,” said Leslie Moonves, President and Chief Executive Officer, CBS Corporation. “This acquisition is highly complementary with many of CBS’s content and advertising sales relationships. As we’ve seen with CBS’s outdoor business, the burgeoning use of digital advertising allows great flexibility in tailoring messaging to consumers, and can be efficiently controlled from a centralized location. At the same time, retail outlets will now have access to CBS’s wide array of national and local entertainment, news and sports content from across the Company.”

“We are extremely pleased to join the CBS family and to continue to develop a more exciting shopping environment in local communities across the United States,” said Virginia Cargill, President and CEO of SignStorey. “Our state-of-the-art digital screens give consumers access to information where and when they want it; and the addition of CBS content, resources and contacts will make for an even richer experience for retailers, shoppers and advertisers alike.”

SignStorey benefits from strong relationships with retailers who partner with the company to provide enhanced in-store shopper experiences and to increase store sales and from advertisers seeking to reach consumers at their point of purchase. Among the Company’s top consumer packaged goods advertisers are: Johnson & Johnson, Colgate, General Mills, and Dannon.

CBS has a pre-existing relationship with SignStorey since 2006 as part of the CBS Television Network’s promotion strategy.

“Out-of-home digital media has become a crucial means by which we and advertisers can gain invaluable impressions in this crowded media landscape,” said George Schweitzer, President of the CBS Marketing Group. “We began working with Virginia and her terrific management team to promote CBS’s fall lineup last summer as part of what we called our ‘Outernet’ strategy, which uses exclusive partnerships to expose CBS programming to consumers outside their homes. We’ve achieved so much together already and now look forward to all that is to come as the new CBS Outernet becomes part of the CBS family.”

If you got into this game thinking you’d grab land and tie it up through contracts, and hope a big guy comes a long to buy your paper, this is a good moment.

I’ve seen SignStorey’s installs here and there, and been something less than excited about, really, any of it. But they have a footprint, and CBS felt it was a $71.5 million CASH footprint.

Again, HOLY CRAP!!!

Advertisements
Explore posts in the same categories: Opinion, Sightings

3 Comments on “CBS buys SignStorey for $71.5 million (and I am not making this up)”

  1. Steve Says:

    I sure hope that it’s a positive “Holy Crap”! I certainly am floored over the valuation they put on the deal while ecstatic over the purchase in general. Obviously CBS understands the true potential of this medium (as most of us reading this did some time ago when we entered the industry). They have been putting their feet in the water for a few years as a way to “repurpose” their programming and make some incremental ad dollars on the side. Now, much like Gannett’s acquisition of Captivate, they are truly invested.

  2. Bill Says:

    So what’s the big deal? $71.5 million is only about $50,000 per store. The cost to equip and install stores is $25 to $30,000 and they have to pay Golden gate Capital back on their investment which I believe to be $50 million.

  3. Rob Gorrie Says:

    I’m with Bill…that’s a really low valuation (and OPEX wasn’t included in Bill’s comments)…you might wonder what was going on behind the scenes. I’ve got a fantastic media investor research report here that has the average valuations at 35x EBITDA. So that’s $2 million earnings if they got the average


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: