Acquisition: Rightster Goes Down the Viral Spiral
Rightster Group plc, the cloud-based global video distribution and monetisation network that enables content owners to upload content once and commercialise everywhere, is pleased to announce the acquisition of Viral Management Limited (“Viral Spiral”).
As well as the proposed acquisition of Base79 Limited and a placing of 75 million new ordinary shares by Cenkos, to raise £42 million ‘before Placing expenses’ at a price of 56 pence per share.
Highlights include:
- Proposed acquisition of Base79 for a total consideration of up to £50 million, plus an adjustment for net cash and working capital to be satisfied by:
- £25 million plus net cash and working capital adjustment in cash on closing, plus a maximum of £25 million in new Rightster shares approximately 12 months after closing based on achievement of earn out conditions.
- The earn out conditions comprise financial and commercial targets to be achieved during the period ending 30 April 2015, and include targets for Base79 on a standalone basis and combined targets of the enlarged group.
- Acquisition of outstanding shares in Viral Spiral for a total consideration of up to £4.1 million, to be satisfied by:
- £1.75 million in cash and 950,120 new Ordinary Shares on closing, plus a maximum of £0.85 million in cash and £0.85 million in Rightster shares approximately 12 months after closing based on achievement of earn out conditions.
- The earn out conditions comprise financial and commercial targets to be achieved over the 12 months following completion, and include targets for Viral Spiral on a standalone basis and combined targets of the enlarged group.
- Placing of 75 million Placing Shares in Rightster to raise £42 million (before Placing expenses) to part fund cash consideration:
- Placing at 56 pence per share, representing a discount of 0.9% to the closing mid- price as at 7 July 2014, the last practicable date prior to the date of this announcement.
- Patrick Walker, of Base79 and a former Senior Director of YouTube EMEA will be joining Rightster’s executive team. Additionally, Chad Hurley, former CEO and co-founder of YouTube, will be subscribing for Placing Shares under the Placing and will be joining the Rightster Advisory Committee.
- The Directors believe that the Base79 acquisition, together with the VML acquisition, will create a scalable digital distribution solution for content creators and brand owners globally and support the Company’s path to profitability.
Strategic Rationale for the Acquisitions:
- The acquisitions will increase Rightster’s global footprint and critical mass across international offices, providing the ability to drive sales momentum in key growth markets for Rightster, including North America, Australia and Latin America.
- The combination of teams across the three companies will create a broad, proven and experienced Executive Team, with the ability to take advantage of the market opportunity. In particular, the Company draws attention to the addition of Patrick Walker as CCO, previously Senior Director of YouTube EMEA.
Base79
- Base79 is the largest YouTube multi channel network outside of North America with approximately 760 million views per month from 1,100+ content partners including SBTV, Reuters, and Ministry of Sound.
- Base79 are specialists in YouTube rights management, audience development, media sales & brand partnerships and possess a world class management team.
- The acquisition of Base79 brings significant scale benefits with media agencies and content owners and will enhance Rightster’s expertise in the growing YouTube ecosystem.
Viral Spiral
- Viral Spiral is a specialist player in social video management, licensing and brand engagement, connecting major brands and agencies worldwide seeking to engage next generation audiences with social video talent.
- Viral Spiral’s management team have a track record and expertise in providing tailored solutions for brands and is expected to provide significant upside for the combined business.
Charlie Muirhead, founder and CEO of Rightster, commented: “Acquiring Base79 and Viral Spiral is transformational for Rightster. Together, they more than double the number of content partners on Rightster’s 360 video distribution platform and catapult us past the 1 billion video views per month milestone, making Rightster the largest YouTube partner outside North America by reach and a top 5 partner in North America. Importantly, this greater scale and expertise improves the service we will be able to offer creators and publishers, improving our ability to both grow audiences and increase monetisation and positions us as a global leader in the exploding online video market for brands and media agencies.”
Ashley MacKenzie, founder and CEO of Base79, commented: “I am delighted that Base79 will now be able to offer an expanded range of services and support to both current and future customers. By joining forces with Rightster, we will be able to bring the expertise and industry relationships of the combined group across the world.”
Damian Collier, founder and CEO of Viral Spiral, commented: “Having worked with, and grown alongside, Rightster for the past 2 years, I am thrilled that we and our team are now joining forces with them and Base79 to enable us to offer the broadest possible range of multi-platform services and solutions to our customers globally, in an increasingly complex marketplace.”
A circular will be sent today to shareholders giving notice of a general meeting of Rightster to be held on Friday, 25 July, 2014 at 10.00 am at the offices of Covington & Burling, 265 Strand, London WC2R 1BH. A copy of the circular will be available on the Company’s website www.rightster.com.
For further information, please contact:
Rightster Group plc | via Newgate Threadneedle |
Alison Crombie | |
Cenkos Securities plc | Tel: 020 7397 8900 |
Max Hartley (Nomad) / Julian Morse (Sales) | |
Newgate Threadneedle | Tel: 0207 653 9850 |
Josh Royston/ Heather Armstrong |
About Rightster
Founded in May 2011 by CEO Charlie Muirhead, Rightster is a global business to business video network for 360° distribution, content-sourcing, audience engagement and monetisation. Rightster’s software and services make it simple for sports, fashion, news, entertainment and viral rights holders to enhance the value of their video whether on a licenced, ad-funded, direct to consumer or paid placement basis.
Rightster’s network currently stands at over 850 content owners and over 7,500 publishers. The Group employs approximately 183 staff in 10 offices across 10 countries.
Introduction
This announcement explains the background to, and reasons for, the Acquisition and the Placing, why the Directors consider the Acquisition and the Placing to be in the best interests of the Company and its Shareholders as a whole and why the Directors recommend that you vote in favour of the Resolutions to be proposed at the General Meeting, notice of which is set out in the circular being posted to Shareholders today.
Charlie Muirhead (a Director), Vesuvius and Invesco Asset Management Limited (“IAML”), significant shareholders, who in aggregate have an interest in 90,903,091 existing issued Ordinary Shares, representing approximately 77.7 per cent. of the existing issued ordinary share capital of the Company, have irrevocably undertaken to vote in favour of the Resolutions to be proposed at the General Meeting.
Reasons for the Acquisitions
The Directors believe that a combination of Rightster, Base79 and Viral Spiral will significantly drive Rightster’s ability to grow in scale, both in its products and services as well as geographically, driving increased data reach and capabilities. Furthermore, these acquisitions will enhance Rightster’s software innovation, enabling Rightster’s technology and platform to be scaled across hundreds of new clients. These acquisitions will also grow Rightster’s off YouTube network, as well as its YouTube expertise, whilst retaining Rightster’s industry position as a leading independent player, with an even stronger senior leadership team.
Information on Base79
Base79 is the largest YouTube Multi-channel Network outside North America.
Base79 creates global audiences for video, partnering with video rights holders and producers to build online audiences and brands, claim and protect their intellectual property, sell premium advertising, and generate new revenue streams on YouTube and other Over The Top platforms.
Based in London, with offices in Berlin, Paris, Madrid, Sydney and Los Angeles and a team of approximately 60, Base79 was formed in 2007 and generated £9.62 million of gross revenue, £3.27 million of revenue after commissions, with a loss before tax of approximately £3.74 million in 2013.
Products that Base79 offers
Specialists in:
- YouTube rights management;
- Audience development; and
- Media sales & brand partnerships.
Information on Viral Spiral
Viral Spiral connects brands with social video talent, representing over 1,500 social videos, including “Charlie Bit My Finger” and “Sneezing Panda”. Viral Spiral generates around 220 million views per month on YouTube and is a trusted guide to major brands & agencies worldwide seeking to engage next generation audiences.
Based in London with 13 staff, Viral Spiral was formed in 2011 and generated £1.9 million of revenue with a profit before tax of approximately £0.01 million in 2013.
Products that it offers include:
- Licensing;
- Research & consultancy;
- Cross promotion/seeding;
- Production and distribution; and
- Monetisation.
Details of the Placing
The Company has conditionally raised £40.9 million (net of Placing expenses) through the issue of 75 million Placing Shares at a share price of 56 pence per Placing Share. Application will be made for the Placing Shares to be admitted to trading on AIM (“Admission”) and such Admission is expected to become effective on Monday, 28 July 2014, following a General Meeting to be held at 10.00am on Friday 25 July 2014.
The Placing Shares will, when issued, rank in full for all dividends declared, made or paid after the date of their issue and otherwise pari passu with the existing issued ordinary shares.
Further details on the Placing will be included in the circular to be posted to shareholders later today.
Viral Spiral Consideration Shares
Application has been made for the 950,120 Ordinary Shares to be issued to Viral Spiral (“Consideration Shares”) to be admitted to trading on AIM and such admission is expected to become effective on Friday, 11 July 2014.
Related Party Transaction
As part of the Placing, it is proposed that IAML will subscribe, at the Placing Price, for 21,381,000 Placing Shares, which will represent approximately 11.1 per cent. of the Enlarged Share Capital. The proposed allotment and issue of the 21,381,000 Placing Shares to IAML will constitute a “Related Party Transaction” for the purpose of AIM Rule 13 as a result of IAML being a “substantial shareholder” as defined by the AIM Rules. As at the date of this document, IAML holds 28.5 per cent. of the existing issued Ordinary Shares. The Directors consider, having consulted with Cenkos, that the terms of the Related Party Transaction are fair and reasonable insofar as the Company’s shareholders are concerned.
INDICATIVE TIMETABLE OF PRINCIPAL EVENTS
Date of this document and posting of the CircularAdmission of the Consideration Shares to trading on AIM to commence | 8 July 201411 July 2014 |
Latest time and date for receipt of Form of Proxy | 10.00 a.m. on 23 July 2014 |
General Meeting | 10.00 a.m. on 25 July 2014 |
Admission of the Placing Shares to trading on AIM to commence | 8.00 a.m. on 28 July 2014 |
CREST accounts to be credited in respect of the Placing Shares in uncertificated form | 28 July 2014 |
Completion of the Acquisition of Base79 | On or before 7 August 2014 |
Posting of share certificates for Placing Shares in certificated form | By 11 August 2014 |
PLACING STATISTICS
Placing Price | 56 pence |
Number of existing issued Ordinary Shares | 116,924,678 |
Number of VCT/EIS Placing Shares | 5,764,000 |
Number of General Placing Shares | 69,236,000 |
Total number of Placing Shares | 75,000,000 |
Number of Consideration Shares | 950,120 |
Estimated Net Proceeds of the Placing receivable by the Company | £40.9 million |
Number of Ordinary Shares in issue immediately following Admission of the Placing Shares and the issue of the Consideration Shares | 192,874,798 |
Aggregate number of Placing Shares expressed as a percentage of the enlarged share capital immediately following Admission and the issue of the Consideration Shares | 38.9 per cent. |
Latest News
The Unapproved Climate Certification Allegedly Causing Mass Greenwashing
Are you left flummoxed in the canned tuna & free range eggs aisle? Just wait till this green certification gets up.
TV Ratings (22/04/2024): Fans Mock “Over The Top” Reaction To New MasterChef Judges
MasterChef returns for its 2024 season. B&T stands by putting peppercorns in Gravox & no one will be any the wiser.
Dentsu Restructure: Muddle, Harvey & Johnston Take Leadership Baton As Bass & Yurisich Exit
A large broom has swept through Dentsu's local ops this morning, taking with it some big names & the air con's cobwebs.
Industry Shares Trends Shaping The Industry This International Creators Day
B&T's asking adland creators to reveal their top trends. And it's not good news for your Jenny Kee cardigan collection.
Mable Extends HOYTS Sensory Screenings Partnership
Mable has extended its HOYTS sensory screening partnership. Vigorously defends its two-star Oppenheimer review.
Orphan Launches ‘They Need Our Help. We Need Yours’ For Children’s Cancer Institute
Anything to do with childhood cancers has B&T's 110% support. That said, we do ignore the red meat & alcohol warnings.
Smile Team Orthodontics & Keep Left Collaborate On Smile-Inducing Campaign
As parents would attest, given the cost of orthodontics you'd expect this campaign to be a lavish production indeed.
Opinion: How Video Calls Neglect Learning Diversity
Need an excuse to duck out of a video call this arvo? Show this to your boss.
DoubleVerify Achieves First-Of-Its-Kind Responsible AI Certification From TrustArc
DoubleVerify receives responsible AI certification. However, not its robotic vacuum that's been seen menacing the cat.
Smile For A Good Cause: The Social Media Campaign Giving Back To The Community
Are you known as the office Austin Powers? More for you teeth than shagability? Get snappy new fangs with this news.
Elon Musk Mocks Albo After ESafety Wins Court Injunction Against X
Albo's 2024 from hell continues - Rabbitohs in crisis, down in the polls and now feuding with world's richest man.
Real Estate Developer In Hot Water Over “Sexually Exploitative” OOH Campaign
Real estate agents again tops in the 'least trusted profession' polls, nudging used car salesmen & ad creatives.
Epsilon’s Shane Hanby: Post-Cookie Era Relies On “Teamwork” Between Brands, Marketers & Tech
This pro predicts more "teamwork" in a post-cookie era. Which spells bad news for the uncooperative or plain stubborn.
Entries For Five Decades Of Advertising Graduates Awards Close On Monday
Entries for the Five Decades of Advertising awards close Monday. And no extensions! Any bribery is open til Wednesday.
Cadbury Extends Commitment To Women’s Sport With Sweet New Wallaroos Deal
Rot your teeth, get fat and support women's sport all at the same time with this sweet new sponsorship arrangement.
Campfire X & Nando’s Partner To Acknowledge Traditional Land Owners Across Australia
Chicken chain unveils important First Nations initiative. The actual chickens more concerned with the Adani coal mine.
Lisa Ronson, Naysla Edwards & Ben Hill Join MFA Awards Signature Judging Panel
MFA Awards adds some serious clout to its judging panel. Still no confirmation Paulini will be performing on the night.
Connect Hearing ‘Sounds Good’ Platform Via Bread Agency
Every office has that one hard of hearing person that's oblivious to the fact. Ramp up their insecurities with this.
Ipsos Iris Data: Australians Prioritise Entertainment & Sports Over Serious News In March
Data shows Aussies prioritising light entertainment over hard news. And who can blame them if you've seen the hard news!
Fur Media Partners With Mad Paws To Support Advertisers
It's never good if your office smells like faeces & brine chunks in aspic. Not if you're pet-friendly agency Fur Media.
MAXIBON Drops Epic Flavour Collaboration Via SICKDOGWOLFMAN
There are few pluses to be had with global warming, except the extension of ice-cream eating season.
Sling & Stone Scrubs Up With Lush Account
Got friends at Sling & Stone? Expect the dreaded loofah and bath bomb for birthdays/Christmas this year.
SBS’s The Cook Up With Adam Liaw Produces ‘Fewer CO2 Emissions Than Industry Average’
SBS could go full vegan for Adam Liaw's seventh season and reduce its TV audience and emissions by 99 per cent.
GumGum & Playground xyz To Merge Media Portfolio, Creating “Powerhouse” Ad Suite
GumGum & Playground xyz tap into consumer mindset. B&T prefers tapping a keg, but whatever works.
All The Winners & Grinners From The TikTok Young Lions Awards Night!
Last week saw every part of the human experience: Exalted, devastated, exhausted & stuffing sausage rolls in the corner.
TV Ratings (21/4/24): Farmer Wants A Wife Wins Sunday Prime Time
Farmer Wants A Wife does make the country life seductive. Apart from the manure stench & the bleating roosters at 5am.
Australia’s Automotive Industry Shifts Gears With CTV
How much was CTV responsible for Australia's record car sales in 2023? Or those horrible oversized American utes?
Australia’s C7EVEN Communications Launches Services In Japan With New Tokyo Office
Aussie comms agency unveils its Tokyo plans. Confirms it's still getting the hang of the toilets over there.
Daniel Goldstein Promoted To Head Of PR At Example
Try as he may to surreptitiously blend in with the wall in his photo, this PR fellow still relatively easy to spot.
Marie Claire & Volvo Partner For The Planet: Nominees For The Inaugural Marie Claire Sustainability Awards Announced
Fashion bible Marie Claire unveils its Sustainability Awards. Yet still refusing to recycle 2023's maxi skirts trend.
Sefiani Unveils A Wave Of Promotions & Appointments
Life's good in PR/comms as Sefiani unveils new hires. Well, bad news for media sites obsessed with redundancy stories.
Yahoo Launches Identity Solutions For CTV
Connected TV just got a whole lot more exciting with this innovation. Bar the incessant Friends re-runs.
Infosum Launches Data Clean Room Solution With Samsung Ads Australia
Infosum & Samsung Ads launch a data clean room solution that's a lot more than a Wettex & squirt of Ajax.
Fast 10: Bread Agency’s Amaury Treguer On Its “Unrivalled” Social Commerce Focus
Bread Agency's Amaury Treguer takes B&T's Fast 10, as he reveals why he won't be sandwiched up against the opposition.
X And Elon Musk To Sue Australia’s eSafety Commissioner Over Sydney Stabbing Takedown Order
If this all wasn't traumatic enough, Elon weighs in to prove he's the world's richest man & world's biggest dickhead.
CRA Siren Award To Be Presented At B&T Awards 2024!
Often attend award nights & think "I wish this night would never end"? Well, B&T's just got that tiny bit longer.