This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
Upon publication
of this announcement, this information is now considered to be in
the public domain.
19
March 2024
Team Internet Group
plc
("Team
Internet" or "TIG" or "the "Company", or the
"Group")
Strategic Acquisition of
Shinez I.O. Ltd
Team Internet Group plc (AIM:
TIG) is pleased to announce it has entered into a definitive
agreement to acquire the entire issued share capital of a leading
online marketing business, Shinez I.O. Ltd and its subsidiaries
(together "Shinez") from its current shareholders (the
"Acquisition").
Business Profile
Shinez specialises in the production
and promotion of highly engaging content across diverse channels
such as social media, search engines, and native networks. Its
currently forty popular portals include ourfashiontrends.com,
falafelandcaviar.com and travelerdreams.com. Leveraging this
expertise, Shinez monetises real-time visits through an expansive
network of advertising exchanges, utilising cutting-edge technology
and strategies. This approach maximises the revenue potential of
each piece of content, and positions Shinez at the forefront of
digital marketing innovation.
Acquisition Terms
Team Internet will acquire Shinez
for an enterprise value of USD 41.8 million, on a net debt free
basis and subject to customary adjustments for net working capital,
payable in cash.
The initial consideration represents
a multiple of 4.0x Shinez's FY23 Adjusted EBITDA. Additional
contingent consideration of up to USD 12.3 million will be due
subject to Shinez achieving ambitious financial targets over the
next two years, payable in cash.
Pro
Forma Impact
Shinez reported USD 111 million in
gross revenue USD 17.2 million in net revenue and USD 10.4 million
in Adjusted EBITDA for the year ending 31 December 2023. Following
the acquisition, the enlarged Group's unaudited pro forma
financials for 2023 indicate an estimated gross revenue, net
revenue and Adjusted EBITDA of approximately USD 948 million, USD
208 million and USD 107 million, respectively. Moreover, this
acquisition is expected to significantly enhance earnings per share
(EPS), with a forecasted adjusted EPS growth in the high
single-digit percentage range for the pro forma fiscal year 2023,
not accounting for potential synergies.
Funding
The acquisition will be funded
through a combination of cash reserves and the Revolving Credit
Facility Agreement.
USD 4.6 million, i.e. 11% of the
enterprise value, will be retained in escrow for four years to
cover for customary warranties and indemnification. A graduated
release schedule is planned for the escrow: up to 50% will be
released on the second anniversary of the transaction's completion,
followed by releases of up to 25% each on the third and fourth
anniversaries.
Strategic Benefits
·
Diversification: Shinez's
distinctive content creation and syndication prowess, complemented
by a balanced mix of organic and paid content promotion strategies,
extends our reach into lucrative, underserved verticals such as
Lifestyle, Food, and Travel, among others. This strategic expansion
not only diversifies our portfolio but also unlocks new advertiser
budgets, significantly enlarging our Total Addressable Market
(TAM).
·
Reduced
Monetisation Network Concentration: The strategic acquisition of Shinez marks a significant shift
in our monetisation network concentration. On a FY23 pro forma
basis, this acquisition would more than double the Online Marketing
segment's revenue generated independently of our Tier 1 channel
partner. Specifically, it elevates the segment's independent
revenue share from 15% to an impressive 27%. On a group level, the
independent revenues increase from 33% to 41%.
·
Enhanced
Capabilities: Merging Shinez's
expertise in media buying, content creation, and campaign
optimisation with TIG's existing expertise will significantly
strengthen our business model.
·
Synergy
Opportunities: We anticipate
significant growth and revenue synergies, including reciprocal
cross-selling to and from Shinez's and TONIC's publisher bases and
deeper vertical integration with major networks, in particular
Meta.
Completion Timeline
The Acquisition is expected to
complete by late April/early May 2024, with all closing conditions
anticipated to be satisfied, with the first full consolidation in
Q3 2024.
CEO's Perspective
Michael Riedl, CEO of Team Internet,
commented:
"This acquisition marks a pivotal
transformation for Team Internet Group, seamlessly aligning with
our innovative OM2 vision - Omni-Media,
Omni-Monetisation. Our vision is to establish a versatile platform
that expertly guides internet users across diverse media landscapes
(Omni-Media) and steers them towards the most effective
monetisation avenues (Omni-Monetisation). The addition of Shinez's
capabilities and market reach will not only diversify our revenue
streams but also accelerate our growth trajectory. We are excited
about the prospects this partnership brings. We welcome the Shinez
team to the Team Internet Group."
-Ends-
For
further information:
Team Internet Group Plc
Michael Riedl, Chief Executive
Officer
William Green, Chief Financial
Officer
|
+44 (0) 203 388
0600
|
|
Zeus (NOMAD and Joint Broker)
Nick Cowles / Jamie
Peel / James Edis (Investment Banking)
Dominic King (Corporate
Broking)
|
+44 (0) 161 831 1512
+44 (0) 203 829 5000
|
Berenberg (Joint Broker)
Mark Whitmore / Richard
Andrews / Alix
Mecklenburg-Solodkoff
|
+44 (0) 20 3207 7800
|
SEC
Newgate (for Media)
Bob Huxford / Alice
Cho / Harry
Handyside / Tom Carnegie
|
+44 (0) 203 757 6880
teaminternet@secnewgate.co.uk
|
About Team Internet Group plc
Team Internet (AIM: TIG) creates
meaningful and successful connections from businesses to domains,
brands to consumers, publishers to advertisers, enabling everyone
to realise their digital ambitions. The Company is a leading global
internet solutions company that operates in two highly attractive
markets: high-growth digital advertising (Online Marketing segment)
and domain name management solutions (Online Presence segment). The
Company's Online Marketing segment creates privacy-safe and
AI-generated online consumer journeys that convert general interest
online media users into confident high conviction consumers through
advertorial and review websites. The Online Presence segment is a
critical constituent of the global online presence and productivity
tool ecosystem, where the Company serves as the primary
distribution channel for a wide range of digital products. The
Company's high-quality earnings come from subscription recurring
revenues in the Online Presence segment and revenue share on
rolling utility-style contracts in the Online Marketing segment.
For more information please visit: www.teaminternet.com