GSTV, the leading retail media network delivering video advertising at gas stations, is in the midst of a strategic sales process, with potential deals being closely watched by industry insiders. But, according to a source with direct knowledge of the deal, challenges are emerging that could delay or disrupt the process.
The GSTV sale process is being managed by Moelis & Company and Solomon Partners.
Business Daily reached out to Moelis & Company and Solomon Partners for comment on the deal, as well as reps with Rockbridge Growth Equity, which owns GSTV. They declined to comment.
"Rockbridge also tried to sell GSTV about three years ago, but bids were limited, so the sale process was pulled," a source with knowledge of the deal, who spoke on condition of anonymity, told Business Daily. "This time, I know the deal was widely shopped to both strategic and private equity buyers, but all the chatter on the street is that Rockbridge recently signed a term sheet with a private equity firm. I have not heard the name of the firm or the closing date."
GSTV has seen tremendous growth since its inception.
The company reaches 115 million unique viewers each month and boasts a highly engaged audience, with 95% of impressions leading to direct "eyes-to-screen" interaction.
In turn, GSTV has experienced impressive revenue growth – driven by investments in digital video, programmatic advertising and retail media expansion – with an estimated 2024 revenue of $120 million, up from $40 million in 2018, and is projected to exceed $300 million by 2029.
However, according to the source, the sales process is not unfolding as smoothly as expected.
“I thought this deal would sell very quickly,” the source said. “Perhaps many of the buyers were scared off early in the process. There are obvious headwinds for gas stations as electric vehicles (EVs) gain market share, limiting growth potential for gas station media."
The source went on to explain that one of the key challenges in the sale process revolves around the business’s underlying leases, which are crucial for the value of any out-of-home media company.
GSTV has forged key partnerships with major fueling technology providers, including Gilbarco Veeder-Root and Wayne Fueling Systems, positioning it as a dominant player in the fueling technology sector.
However, some of those deals have reportedly lapsed.
"The real value is in the underlying leases," the source said. "I believe today that one of the issues might be that GSTV’s contract with Dover Fuel Systems (Wayne Fueling Systems) has expired. Dover represents a big piece of the market, about 45%. So, if that contract is in question, or worse, up for grabs, then the competitive moat around the business is gone, opening up a slew of very capable potential competitors to come into the space and partner with Dover, creating a large competitor overnight."
As a result, other media companies may now see an opportunity to enter the market, potentially creating a more competitive landscape for GSTV.
"That could open the door for other players. I’m sure the major out-of-home (OOH) firms would explore it—companies like Clear Channel, Lamar, OutFront. Maybe even international companies would want to enter this market now,” the source said. “Despite GSTV’s size, there is now room for new competition. I wouldn’t be surprised to see one of the big guys try and enter the business.”
There are even rumors of former GSTV founder Mark Alhermizi re-entering the fray.
"I heard rumors that the original GSTV founder, who sold to Rockbridge in 2014, has been poking around,” the source said.
Alhermizi is rumored to be working with one of the larger media brands to start a competitor.
“Alhermizi is in talks to partner with one of the major media players to start an exclusively Dover/Wayne gas station media network," the source said.
When contacted about that possibility, Alhermizi declined to comment.
“I appreciate your interest in this matter, but I'm not in a position to comment at this time,” Alhermizi told Business Daily.