TIDMXLM
RNS Number : 4659K
XLMedia PLC
02 September 2021
2 September 2021
XLMedia PLC
("XLMedia" or the "Group" or the "Company")
Acquisition of business and assets of Saturday Football Inc.
US$24 million acquisition of highly complementary quality US
sports assets
XLMedia (AIM: XLM), a leading global digital performance
publisher, announces the acquisition of the business and assets of
Saturday Football Inc., a major online publisher of college
football news for a total consideration of US$23.0 million cash
(c.GBP16.8 million) plus US$1.0 million (c.GBP0.7 million) in long
term incentive shares (the "Acquisition").
Founded in 2014, Saturday Football Inc. operates two leading
college football media sites, saturdaydownsouth.com and
saturdaytradition.com , which cover the popular Southeastern
Conference ("SC") and Big 10 college sports conferences. Combined,
the sites generate an audience of approximately 10 million visits
per month.
XLMedia will pay an upfront consideration of US$11.0 million in
cash plus an additional US$12.0 million, payable over three years.
In addition, the founders, who are remaining with the business,
will receive US$1.0 million in long-term incentive shares of
XLMedia as detailed below. The Acquisition will be funded from
XLMedia's existing cash reserves.
The acquisition of Saturday Football Inc. follows the
acquisitions of Sports Betting Dime and CBWG Sports ("CBWG") which,
when combined, significantly strengthen XLMedia's position in the
fast-growing US sports market. The addition of Saturday Football
Inc to XLMedia's portfolio will create significant cross marketing
opportunities for the wider Group and provides good reach across
the South and Midwest States, including markets yet to legalise
sports betting.
The Acquisition accelerates XLMedia's strategy to operate
content rich websites across attractive growth geographies, and is
expected to deliver the following key benefits:
-- Enables the Group to access the sizable US College Football
marketplace, which is highly complementary to XLMedia's existing US
sports vertical
-- XLMedia will seek to leverage Saturday Football Inc.'s key
brand sponsorships, in addition to benefiting from established
social media, video and content production, and programmatic AdTech
capabilities
-- The Acquisition is the conversion of an existing agency
partnership between XLMedia and Saturday Football Inc. which was
established in December 2020, during which time a close working
relationship with management has generated a number of revenue
opportunities
-- The Acquisition progresses the Company's strategy to increase
its exposure to high growth regulated markets, particularly in the
US and significantly strengthens the Company's position in US
sports betting
-- The Saturday Football Inc. business is profitable and growing
Information of Saturday Football Inc.
Saturday Football Inc. - an agency partner of XLMedia's since
December 2020 - is an online publisher for college sport news, with
its websites focused on two key regions: the South through its
saturdaydownsouth.com site and the Midwest via
saturdaytradition.com.
Saturday Football Inc. employs approximately 10 full time
employees and 55 contractors, providing skills and capabilities in
marketing, content production, search engine optimisation and
technology development.
Through the due diligence process, XLMedia management have
estimated the owned sites generated unaudited revenue and EBITDA,
before founders' compensation, over the trailing 12 months ending
31 July 2021 , of approximately $2.5 million and approximately
$606,000 respectively. Management believes that post integration
into the Group the assets will generate significantly more revenue
due to closer collaboration with CBWG.
Notice of Results
Management will provide a full update on the Group's performance
in the interim results, to be announced on Thursday 23 September
2021.
Stuart Simms, Chief Executive Officer of XLMedia, commented:
"We are delighted to be acquiring Saturday Football Inc.,
cementing an already extremely productive working relationship.
Over the last twelve months we have got to know the business very
well and have been hugely impressed with their team, their systems
and most importantly their market reach.
"This transaction provides additional operation depth and reach
to our sports footprint which we believe is fast becoming a
significant growth driver for our business.
"With the forthcoming US College Football season about to
commence, the timing of this transaction couldn't be better with
our growing US presence ideally positioned to further support the
team at Saturday Football Inc."
Ken Dorward, XLMedia Head of North America, added:
"We are thrilled to be delivering on XLMedia's strategic vision
for Americas sports, and look forward to welcoming the Saturday
Football Inc. team, who really complement our existing portfolio as
we pursue this once in a generation US opportunity."
Transaction details
The aggregate approximate consideration will be US$24 million (c. GBP17.5 million) made up of:
-- US$11 million initial cash consideration payable upon completion;
-- US$4 million deferred consideration payable on the first anniversary;
-- US$4 million deferred consideration payable on the second anniversary;
-- US$4 million deferred consideration payable on the third anniversary; and
The three founders of Saturday Football Inc., Mr Josh Gates, Mr
Kevin W. Duffey and Mr Jonathan T. Cooper, are being retained in
the business. The founders will be granted nil cost share awards in
the Company under the 2020 Global Share Incentive Plan with a value
of $333,333.33 each. These share awards will become fully vested on
the fourth anniversary of the date of the grant, subject to meeting
performance conditions and other criteria, and a further two year
holding period.
This announcement contains inside information for the purposes
of the UK version of Article 7 of Regulation (EU) 596/2014
("MAR").
For further information, please contact:
XLMedia plc ir@xlmedia.com
Stuart Simms, Chief Executive Officer via Vigo Consulting
Rowan Ellis, Interim Chief Financial
Officer
www.xlmedia.com
Vigo Consulting Tel: 020 7390 0233
Jeremy Garcia / Fiona Hetherington /
Kendall Hill
www.vigoconsulting.com
Cenkos Securities plc (Nomad and Joint Tel: 020 7397 8900
Broker)
Giles Balleny / Max Gould
www.cenkos.com
Berenberg (Joint Broker) Tel: 020 3207 7800
Mark Whitmore / James White / Tejas
Padalkar
www.berenberg.com
Notes:
XLMedia is a global digital performance publisher. Operating
across a variety of verticals including online gambling, personal
finance, sports and technology, the Group uses proprietary tools
and methodologies to identify and target high value clients for
platform operators.
XLMedia has a clear transformation strategy, which will enable
it to shape the future of the performance publishing industry. The
Company has set out a clear strategic agenda under two fundamental
priorities:
-- A balanced portfolio of online assets
o XLMedia seeks to create a balanced portfolio of websites to
cover a range of attractive geographies, both stable and
high-growth verticals and with greater exposure to regulated
markets. In doing so, the Company will focus particularly on
developing presence in North American sports, primarily through
targeted acquisition.
-- Branded, content-rich, engaging websites
o XLMedia will consolidate its online portfolio, concentrating
on a much smaller number of publishing assets, and focusing its
resources on optimising this core set of premium sites for its
chosen markets. These content-rich, engaging websites, underpinned
by intelligent market-leading technology, will seek to build
stronger lasting relationships with consumers and enhance
monetisation opportunities.
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END
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September 02, 2021 02:00 ET (06:00 GMT)
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