Rouge Media has found what president and CEO Martin Poitras calls a “white knight” in its bid to expand, with investment firm Fairfax Financial acquiring an undisclosed majority stake in the out-of-home advertising company.
Terms of the deal were not disclosed, but Poitras called it a “major catalyst” in Rouge Media’s 10-year plan for additional expansion in North America and foreign markets.
Poitras told Marketing that he has received “numerous” offers from would-be partners in recent years, leading him to recruit PwC as an advisor to determine the best course of action.
Established in 2003, Toronto-based Rouge Media specializes in place-based out-of-home media, operating more than 10,000 digital faces across the country. It specializes in two key audience demographics: Adults 18-34 and women 18+.
Its two core networks include a beauty network consisting of static and digital inventory in more than 1,500 nail and hair salons, and a campus network spanning approximately 110 post-secondary institutions. Its products include a charging station featuring a 22-inch digital screen.
Rouge Media first entered the U.S. market with its beauty network approximately four years ago, but Poitras said the company required extra capital to expand in the world’s largest advertising market.
“It’s a big country, so you definitely need some capital to pay for all the building,” he said. “All of the decisions we were faced with, even though they made sense, we could not say yes to all of them. Now we can.”
Poitras said that the Fairfax deal has already provided the necessary capital for Rouge Media to acquire the San Diego-based company On Campus Media, which operates approximately 3,500 digital screens on more than 450 campuses.
Rouge Media is now looking to grow its existing verticals and possibly expand into complementary areas, with Poitras predicting increased M&A activity in the coming months. “Part of my excitement as an owner is proceeding with more acquisitions,” he said.
The company currently employs approximately 125 people in Canada and the U.S., where it has offices in New York and Los Angeles. The company plans to add what Poitras called a “massive influx” of staff that will be used to grow the top 16 U.S. markets.
In its new Global Entertainment and Media Outlook 2016-2020 report, PwC said that digital out-of-home has become a principal growth driver for the Canadian out-of-home industry, generating US$213 million in 2015 and growing to US$343 million (representing approximately 47.3% of total out-of-home revenue) by 2020.
