TIDMEBQ
RNS Number : 4878G
Ebiquity PLC
30 March 2022
30 March 2022
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS
RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION, DISTRIBUTION OR
FORWARDING, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO
OR FROM THE UNITED STATES, AUSTRALIA, CANADA, NEW ZEALAND THE
REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY OTHER JURISDICTION IN WHICH
SUCH PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE UNLAWFUL.
THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS NOT AN
OFFER OF SECURITIES IN ANY JURISDICTION.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF REGULATION 596/2014 AS IT FORMS PART OF UK DOMESTIC
LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMED
("MAR").
Ebiquity Plc
Proposed Acquisition of Media Management, LLC.
Ebiquity plc ("Ebiquity" or the "Company"), a world leader in
media investment analysis, is pleased to announce the proposed
acquisition by Ebiquity Inc., the Company's US subsidiary, of Media
Management, LLC. ("MML"), a US-focused media audit specialist, for
an initial consideration of GBP6.1 million(1) with a deferred
consideration element payable in 2025 (the "MML Acquisition").
Acquisition Highlights
-- MML is a US media audit company providing clients with
transparency and accountability of their media investments, and
agency performance validation using its proprietary Circle Audit(R)
technology
-- The MML Acquisition accelerates the scaling of Ebiquity in
the world's largest advertising market, and increases its presence
with large US corporates
-- MML's automation practices and combination of the two
businesses will improve operating efficiencies and drive realisable
cost synergies across the enlarged business
-- In the financial year to 31 December 2021, MML reported
revenue of GBP5.4 million and operating profit of GBP0.7
milion(2)
-- Initial consideration of GBP6.1 million(1) payable in cash on completion of the acquisition
o c.GBP5.1 million(1) (84% of initial consideration) in cash
funded from existing cash resources
o c.GBP1.0 million(1) (16% of initial consideration) in cash
applied by the MML Vendors (as defined below) to subscribe for
1,737,261 new Ordinary Shares of Ebiquity (the "MML Shares"). The
MML Shares will be subject to an 18-month lock-in and an ongoing
orderly market agreement
-- Deferred consideration payable in 2025
o Based on 1.0x of 2024 reported adjusted earnings before
interest and tax of the combined Ebiquity US and MML businesses
expected to be at least GBP3.0 million(3)
o 80% payable directly in cash to the MML Vendors; 20% in cash
to be applied by the MML Vendors to subscribe for new Ordinary
Shares of Ebiquity and they will be subject to the same lock-in and
orderly market provisions as the MML Shares
-- Completion of the MML Acquisition is conditional on the
admission of MML Shares to trading on AIM expected on or around 4
April 2022
Overview of MML
MML is a US-based media audit company providing clients with
transparency and accountability of their media investments, and
agency performance validation, founded in St Louis, Missouri in
1995 by Thomas Bridge. MML uses a proprietary circle audit
technology that enables it to analyse 100% of its clients' "media
buy" data from all major "media buy" management platforms. MML has
a 40-person team centred in St Louis and distributed across the US.
The company has a high-quality client roster that includes Geico,
GM, AT&T, AstraZeneca and Samsung with average client tenure of
11 years. The founder and current chief executive officer of MML,
Thomas Bridge (the "Founder"), will remain with the business and
join Ebiquity's North American management team.
In the financial year ended 31 December 2021, MML's revenue grew
c.29% year-on-year to GBP5.4 million and it made an improved
operating profit of GBP0.7 million with operating profit margin of
13.4 %(2) . As at 31 December 2021, MML had gross assets of GBP1.8
million(2) .
Acquisition rationale
The Board believes that there is a strong strategic and
financial rationale for the MML Acquisition. The acquisition of MML
and its complementary service offering would add scale to
Ebiquity's business in the US, the world's largest advertising
market. MML's client roster of blue-chip American corporates will
create significant cross-sell opportunities in the US for the
enlarged group. MML's strong automation practices will improve
operating efficiencies and drive realisable cost synergies.
The Ebiquity Group's business in the US would also be
immediately scaled with revenue of GBP10.7 million in the financial
year to 31 December 2021 on a pro forma basis(4) .
The MML integration will be managed by Ebiquity's US management
team headed by Paul Williamson (MD of Ebiquity's current North
American business) and Thomas Bridge (founder and current CEO of
MML).
Consideration
The acquisition is being effected by an agreement dated 29 March
2022 between Ebiquity, Ebiquity Inc. (the Company's US subsidiary),
MML, Bridge Media Services Inc. (held by the Founder and his
closely associated persons, together with Bridge Media Services
Inc., the "MML Vendors") and the MML Vendors (the "MML Acquisition
Agreement").
The initial consideration element for the MML Acquisition is
GBP6.1 million(1) payable in cash on completion. Of the GBP6.1m(1)
initial consideration, the 16% (c.GBP1.0 million(1) ) of the cash
has been applied by the MML Vendors to subscribe for 1,737,261 new
Ordinary Shares of Ebiquity which has been calculated (rounded down
to the nearest whole number) by reference to the middle market
quotations for the Ordinary Shares as shown by the AIM Appendix of
the Daily Official List of the London Stock Exchange for the five
Business Days prior to the date of this Announcement.
Under the MML Acquisition Agreement, the MML Vendors will hold
1,737,261 MML Shares following the completion of the MML
Acquisition.
The deferred consideration element for the MML Acquisition will
be payable in 2025 based on 1.0x of reported 2024 adjusted earnings
before interest and tax of the combined Ebiquity US and MML
businesses which is expected to be at least GBP3.0 million(3)
payable in cash of which the MML Vendors will apply 20% to
subscribe for Ordinary Shares (the "Earn-Out Shares", and together
with the MML Shares, the "New Shares") which will be calculated
(rounded down to the nearest whole number) by reference to the
middle market quotations for the Ordinary Shares as shown by the
AIM Appendix of the Daily Official List of the London Stock
Exchange for the five Business Days prior to the date the deferred
consideration is agreed between the parties. The Company expects to
have sufficient cash headroom in 2025 to satisfy the deferred cash
consideration for MML.
Under the MML Acquisition Agreement, the MML Vendors have
undertaken, save in limited circumstances, not to dispose of any of
their interests in the New Shares at any time prior to the 18-month
anniversary of the date of their issue. In addition, in order to
ensure an orderly market in the Ordinary Shares, the MML Vendors
have further undertaken they would not, save in limited
circumstances, deal or otherwise dispose of any such interests in
the New Shares other than through Panmure Gordon (or such other
broker appointed by the Company from time to time).
The MML Acquisition has been financed through the Company's
existing cash resources and the MML Shares will be issued under
existing Shareholder authorities. The MML Acquisition will complete
conditional on admission of MML Shares to trading on AIM.
Admission of MML Shares
Application will be made to London Stock Exchange plc for the
MML Shares to be admitted to trading on AIM. It is expected that
admission of the MML Shares will take place at 8.00 am on or around
4 April 2022 ( the "Admission").
The MML Shares will, when issued, rank equally in all respects
with the existing Ordinary Shares including the right to receive
dividends and other distributions declared following Admission.
Nick Waters, Chief Executive Officer of Ebiquity, said:
"This represents an exciting move for us to scale our North
American business. MML brings a team of experienced and highly
skilled media specialists, complementary capabilities, an
outstanding patented technology platform in Circle Audit, and a
roster of high-quality blue chip American clients. The combination
of Ebiquity and MML unlocks strong potential for the business, and
significantly advances and scales our business in the US, the
world's largest advertising market."
Thomas Bridge, Founder and current Chief Executive Officer of
MML, said:
"MML is excited to join the Ebiquity family, expanding our
coverage domestically & internationally for our clients. This
step further reinforces MML's commitment to our team and our
clients in continuing our work in driving third-party media
accountability."
Notes
1 MML initial consideration of US$8.0m; US$ / GBP exchange rate
assumed rate of US$1.3157.
2 Financial year to 31 December 2021; FX of $1.375; operating
profit calculated on a normalised basis adjusted for owner managed
costs including the salary, benefits and bonus of the founders and
other non-trading expenses.
3 MML deferred consideration expected to be at least US$4.0m;
US$ / GBP exchange rate assumed of US$1.3157.
4 Pro forma financials have been prepared for illustrative
purposes only and by their nature address a hypothetical situation
and, therefore, do not represent the Company's actual financial
performance. It is assumed that the acquisition has taken place on
1 January 2021.
Market abuse regulation
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/201 as it forms part of UK
domestic law by virtue of the European Union (Withdrawal) Act 2018
("MAR"). Upon the publication of this announcement via a Regulatory
Information Service this inside information is now considered to be
in the public domain.
The person responsible for arranging release of this
announcement on behalf of the Company is Alan Newman, Chief
Financial Officer and Chief Operating Officer of the Company.
Ebiquity plc +44 20 7650 9600
Nick Waters, CEO
Alan Newman, CFO & COO
Camarco
+44 7990 653
Ben Woodford 341
+44 7733 124
Geoffrey Pelham-Lane 226
Panmure Gordon (Financial Adviser, Nomad and
Broker) +44 20 7886 2500
Alina Vaskina / Harriette Johnson / Dougie
McLeod (Corporate Advisory)
Charles Leigh-Pemberton / Sam Elder (Corporate
Broking)
About Ebiquity plc
Ebiquity plc (LSE AIM: EBQ) is a world leader in media
investment analysis. It harnesses the power of data to provide
independent, fact-based advice, enabling brand owners to perfect
media investment decisions and improve business outcomes. Ebiquity
is able to provide independent, unbiased advice and solutions to
brands because we have no commercial interest in any part of the
media supply chain.
We are a data-driven solutions company helping brand owners
drive efficiency and effectiveness from their media spend,
eliminating wastage and creating value. We provide analysis and
solutions through five Service Lines: Media management, Media
performance, Marketing effectiveness, Technology advisory, Contract
compliance.
Ebiquity's clients are served by more than 500 media specialists
operating from 19 offices covering 80% of the global advertising
market.
The Company has the most comprehensive, independent view of
today's global media market, analysing US$55bn of media spend from
75 markets annually, including trillions of digital media
impressions. Our Contract Compliance division, FirmDecisions,
audits US$40bn of contract value annually.
As a result, more than 70 of the world's top 100 advertisers
today choose Ebiquity as their trusted independent media
advisor.
For further information, please visit: www.ebiquity.com
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END
ACQWPURCWUPPUUU
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March 30, 2022 02:00 ET (06:00 GMT)
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