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Better Collective AS continues to diversify its media services, by announcing that it has agreed to acquire Skycon Limited for a total consideration of up to £45m.
The transaction will see the Stockholm-listed media group expand its capabilities within digital display advertising, by integrating Skycon assets to expand its Paid Media unit and acquiring its ‘recurring revenue share database’ .
Dealmakers have agreed to pay up to £45m for the acquisition of Skycon assets, with £25m as an upfront cash payment and further £20m allocated in earn-out rewards.
Earn-outs are contingent on specific financial performance targets within a 12-month period following the closing. The acquisition will be financed through cash, with the earn-out portion expected to be at least 50% funded by the existing revenue share database.
Jesper Søgaard, Co-Founder and CEO of Better Collective, commented: “We have invested heavily in growing our Paid Media division to reach its current significant scale, while we also have invested in moving revenues to recurring revenue share contracts.
“During the past year, our efforts have proven successful and acquiring Skycon will be highly synergistic to this journey. Skycon is a great business, which is built on Better Collective’s favoured revenue share model.”
Better Collective recently lauded the ‘strong diversification’ of its media assets, having achieved a record-breaking quarter to close full-year 2022 trading.
Skycon has recently reported significant growth, of which Better Collective looks to build upon via several cross-selling synergies, while also improving its own business through new media synergies.
Publishing its fourth quarter and FY2022 results, the media publisher achieved record Q2 revenues of €86m, up 63% on 2021 comparatives of €53m – helping FY revenues stand at €270m (FY2021: €177m).
The transaction sees Better Collective upgrade its FY2023 financial targets, as revenue projections increase to €305-315m and EBITDA before special items to €95-105 million.
The deal is expected to result in synergies, such as expanding Skycon’s partnerships, broadening its geographical scope, and optimising its value per future new depositing customer (NDC).
Continuing on the partnership, Søgaard said: “It is a perfect fit as we can leverage our leading skill set within media buying to grow Skycon’s revenues.
“We also see a clear path to further growth as the asset can be scaled across more of our business partners, into new territories, and optimised with our unrivalled first party data in sports media. This acquisition will further deepen our moat.”
Additionally, the company is now able to broaden the geographical scope of Skycon, for instance, into the US. To aid this, Skycon will be utilised on the AdTech platform which Better Collective is currently building.
Similarly, February saw the company make further investments, after confirming that it had acquired a 5% stake in main rival Catena Media Plc.
At the time, Better Collective stated it had informed Stockholm-listed Catena of the new shareholding, adding that it “is satisfied with the position and will not comment any further on the matter.”
