Adrian J Cotterill, Editor-in-Chief
Searchlight Capital Partners, L.P. this week announced that funds managed by Searchlight have entered into a definitive agreement to acquire a controlling interest in TouchTunes Interactive Networks, the largest in-venue interactive music and entertainment platform, featured in over 71,000 bars and restaurants across North America and Europe.
The “controlling interest” means that all TouchTunes shareholders, except the management team, were bought out. VantagePoint Capital Partners and its affiliates previously controlled Touchtunes with 3i Group plc holding a minority stake.
No indication has been given as to how much Searchlight paid but we understand that this was a sizeable deal.
Vending Times suggested that TouchTunes could fetch USD 500M in an article here back in September 2014 but we believe that is very wide of the actual price paid.
However, we do believe that this could be one of the biggest DOOH deals in recent times mostly because the TouchTunes business is NOT (at the moment) actually DOOH advertising related BUT we understand that their plans for growth are absolutely in this space (TouchTunes joined the DPAA back in October 2011). This is big news for the DOOH industry!
Searchlight Capital Partners are no stranger to DOOH of course – we’ve had Eric Zinterhofer, a Founding Partner of Searchlight, speak at The DailyDOOH Investor Conference many times and of course Eric and his team met Ocean Outdoor at our event two years ago and secured the deal in the UK, just before Christmas, to buy a controlling interest in Ocean.
Business sections of various national newspapers have reported that 3i Group sold its minority stake for GBP 38 Million (a sale representing a 2.1 times money multiple on its original investment of GBP 24 million).
Eric Zinterhofer told us “We are deeply impressed by the management of TouchTunes. Charles Goldstuck and his team have a clear track record of successful innovation, on which they have built a market leading business in an attractive sector. TouchTunes has many exciting opportunities both in North America and internationally. We look forward to supporting the Company as it executes on this next phase of growth.”
Charles Goldstuck, CEO of TouchTunes, was quoted as saying “Searchlight is the perfect partner for TouchTunes as we prepare for the next phase of our global growth plan. They are extremely well versed in the global digital media world, and are perfectly positioned to help the Company expand on its forward looking innovation efforts.”
TouchTunes is not only the largest in-venue interactive music and entertainment platform, featured in over 71,000 bars and restaurants across North America and Europe, but also a leading digital out-of-home advertising platform. TouchTunes’ national network provides brands with a unique opportunity to target consumers with highly relevant ads and other promotions while in-venue.
TouchTunes’ platform provides location-based digital solutions that encourage social interactions through shared experiences. Music is at the core of TouchTunes’ experience with millions of songs played daily across the network and a mobile app that lets users find nearby jukebox locations, create playlists, and control the music in-venue directly from their phone. The mobile app is available on the iOS and Android platforms and has been downloaded over 3.5 million times.
TouchTunes’ award-winning products and services also include an integrated photo booth, the first fully licensed commercial karaoke system and an interactive TV messaging and engagement solution. The network also serves as a highly scalable digital out-of-home activation platform that provides highly targeted advertising and promotional opportunities for consumer brands.
TouchTunes is headquartered in New York City, with offices in Chicago, IL, Montreal, Quebec and London.
Peter J Solomon Company is serving as financial advisor to Searchlight in connection with this transaction, and Paul, Weiss, Rifkind, Wharton & Garrison is acting as counsel to Searchlight.
Moelis & Company is serving as financial advisor to the Company, and Orrick, Herrington & Sutcliffe LLP is acting as legal advisor.
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