QMS Media Limited has reached an agreement in principle to acquire the majority interest of TGI Systems Corporation (TGI) and TGI Europe GmbH (TGIE).
The move sees QMS continuing the expansion of its existing sports technology and media rights business, QMS Sport.
The key commercial arrangements include a total investment by QMS of approximately $40 million to acquire a 90 per cent stake in TGI and TGIE, both internationally recognised sports media companies providing digital technology solutions across the USA, Europe and South America.
Another strategic shareholder will hold 5 per cent of the entities, while existing key management will also retain 5 per cent.
On a 12 month pro-forma basis, the acquisitions are expected to contribute EBITDA of between $7-8 million before minorities for FY19.
The transaction is expected to be EPS accretive for QMS shareholders in FY19.
The transaction is subject to approval from QMS’ lender and of customary closing conditions and mechanics, including the finalisation of interrelated transactions.
In Germany, such transactions also require notarisation in order to be effective. It is expected that the transaction will formally complete in the last quarter of this calendar year.
TGI/TGIE are world leaders in the delivery of sports technology including high end LED signage, software management platforms and a range of unique fan engagement tools to help clubs, agencies and rights holders optimise their brand exposure and enrich the consumer experience at major events.
TGI/TGIE are at the forefront of virtual signage technology developments and are well placed to participate in the changing ways that LED perimeter signage and virtual signage are displayed on broadcast feeds.
These premium acquisitions complement the existing QMS Sport portfolio across Australia and New Zealand, providing additional scale and growth opportunities.
This will further strengthen QMS’ position in key strategic international sports markets as it continues to expand its geographic footprint, and simultaneously diversify revenue channels.
QMS managing director and group CEO Barclay Nettlefold said: “As part of our growth strategy, these investments mark an important new era for our Sports business, as it continues to build on its market-leading reputation.
“With our combined sports technology and digital media assets, QMS Sport is set to become a formidable provider of digital technology globally.
“This combination brings together major international sporting clubs and codes under one unified and powerful technology and digital media platform.
“We have identified that the international sports environment provides QMS with an avenue to deliver further value to our shareholders and I am genuinely excited by the growth opportunities these investments present.”
TGI president Patrick Vendrely said: “TGI/TGIE represent top tier sporting organisations and clubs across Football, Rugby and Cricket globally, and have a significant strategic focus to further expand and develop our sports technology business.