Mergers and acquisitions

Partners at Green Square, Corporate Finance Advisors to the media and marketing sector, cast their eyes over the latest industry deals and look ahead to the next tranche ...

...of acquisitions.

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18 January 2013 - 12:28pm | posted by | 0 comments

Deals round-up: As predicted, data and mobile acquisitions kick off the new year

Green Square's Barry Dudley runs the rule over the latest dealsGreen Square's Barry Dudley runs the rule over the latest deals

Last week, my colleague Tony Walford talked about how mobile, data and other niche services would be what acquirers would be looking for this year.

And so, it seems, we have proof already that this might indeed be the case. The first three notable deals of 2013 have all been in these areas.

Essence, one of those ambitious mini-groups whose activities were one of the more interesting trends of 2012, has been on the acquisition trail already.

Essence was started up just eight years ago with backing from Carphone Warehouse founder Charles Dunstone and counts eBay and Pret a Manger among its clients. Since 2005 it has grown impressively, including a bridgehead into Manhattan; last year we wrote about Essence’s acquisition of Black Bag, a San Francisco-based ad agency which gave it a useful toehold on the West Coast too. It has obviously seen the opportunities available Stateside.

A week ago it snapped up Point Reach, a Seattle-based full-service mobile advertising agency. Point Reach is a highly-rated business that delivers the kind of performance-driven campaigns (backed by strong analytics) that clients seem to love these days. Disney, Walgreens and Stubhub are among its clients.

It looks like a good fit. First of all, it strengthens Essence’s presence on the West Coast; secondly, vendor and acquirer have a lot in common – not least eBay as a client - and both have an analytics-driven, entrepreneurial culture; and thirdly, Essence now has a 100% mobile-focussed operation with an experienced staff base.

The Seattle Point Reach team will be assuming the Essence Digital name and will, according to the acquirer, be operating on a global basis.

The other area we’ve been talking about in this blog over the past few months is data analytics. A couple of weeks ago educational benchmarking and analytics group i-graduate was acquired by learning software specialist Tribal Group in a deal thought to be worth up to £7.5m (Tribal paid an initial £2.86m on completion of the deal, with a maximum consideration of up to £7.5m to be paid depending on i-graduate’s earnings until December 2015).

I-graduate was founded in 2005 by Will and Lindsay Archer. The founders will continue to lead the business and will head up integration of i-graduate’s offerings with Tribal’s existing financial benchmarking and analytic capabilities.

The research i-graduate produces will be combined with the group’s existing software, which supports adult learning, careers and professional development and provides education inspections and improvement services internationally. As you can see, that means it’s a very good buy for the acquirer – software specialist acquires analytics expert!

In the third deal, sports, music and events management specialist James Grant Group has just acquired Hall Or Nothing, a long-established and extremely well-thought-of music management agency – a real niche deal to go with the niche deals above.

The acquisition bolsters JGG’s expertise and presence in the music space, and complements its management and professional services proposition. HON will create a music management division for JGG while retaining its current name and branding.

Founded in 1989, HON looks after a wide range of musicians and bands, from Brit Award winners and multi-platinum sellers to some of the hottest musical talent in the UK, including Manic Street Preachers, The Script, The Horrors and Pixie Lott.

Mike Wallwork, COO of JGG, explains: “Expanding our footprint in music has always been part of our strategic growth plans and this acquisition represents a logical extension to our other management businesses in the entertainment sector. We are very excited about the industry knowledge, experience and reach the Hall or Nothing team will bring to our Group in the music arena. We look forward to using our expertise to help build and develop the company’s service proposition.”

The move is a continuation of a growth strategy led by the JGG management team and Gresham, its private equity partner, since the creation of the Group in August 2009. With the addition of Hall or Nothing, JGG now provides market leading service offerings in music, sports and media talent management, brand consultancy, PR, media and sports finance, digital, music publishing, IP development and exploitation, live events, literary representation, accountancy, television business affairs consultancy and voiceover services.

And for HON, there’s the opportunity to tap into the support of a strong partner to help it and its clients navigate its way through the huge structural changes the entertainment industry is currently undergoing.

Barry Dudley is a partner at Green Square, corporate finance advisors to the media and marketing sector.

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