Perform Group plc (“Perform”), the global market leader in the distribution and commercialisation of sports content across connected digital platforms, announces that it has acquired a majority stake in Mackolik Internet Hizmetleri Ticaret A.S. (“Mackolik”) which owns and operates a number of Turkey’s leading independent sports websites including mackolik.com and sahadan.com.
Consideration
Perform is acquiring an initial 51% stake in the business for cash consideration of 40.8 million Turkish Lira (TRY) (£14.6 million) based on an agreed ten times multiple calculation of the full year audited EBITDA results of the business for the year ending 31 December 2012. This initial payment will be made out of the Group’s existing cash resources and will be adjusted if reported EBITDA for 2012 is higher or lower than the current forecast of TRY 8 million. In addition, Perform will acquire the remaining 49% for cash, based on an agreed ten times multiple calculation of the average full year audited EBITDA results of the business for the years ending 31 December 2014 and 2015 weighted 25% and 75% respectively, with maximum additional consideration payable in March 2016 of up to £60.4 million.
Acquisition Rationale
The acquisition significantly enhances Perform’s presence in Turkey, the fastest growing digital market in Europe, and is in line with Perform’s stated strategy for growth through acquisitions announced at the time of the IPO.
Mackolik is the market leader in digital sports media in Turkey, operating 10 sports websites:
– These include Turkey’s top two most visited sports sites – mackolik.com and sahadan.com, which averaged over 7.8 million and 8.5 million monthly unique users across the 5 months ending May 2012, up from 5.7 million and 6.9 million for the same period in 2011, representing growth of 37% and 23% respectively (source: Google Analytics).
– Its websites contain a mix of original sports editorial content, live scores and social features including forums and moderated chat. The sites are available in desktop formats and via a range of smartphones and tablet platforms.
– In the year to 31 December 2011 Mackolik reported advertising and subscription revenues of TRY 6.6 million (£2.4 million), operating profits of TRY 2.4 million (£0.9 million) and a pre-tax loss of TRY 1.0 million (£0.4 million). Gross assets at 31 December 2011 were TRY 4.9 million (£1.8 million).
Turkey, the 6th largest economy in Europe, represents an exciting market for Perform given the growth in internet usage, online advertising and its young and growing population:
– Approximately 30 million active internet users; mobile is a fast growing addition with 21 million 3G mobile subscribers.
– Online advertising spend in Turkey is expected to grow by 27% CAGR between 2011 and 2016.
– 2nd largest population in Europe, with 51% of the population under 30 years old.
The acquisition is in line with Perform’s acquisition strategy:
– Acquisition of a ‘local champion’, which can be enhanced with Perform’s world-class sports editorial, data and video content.
– The acquisition is expected to be accretive to earnings in 2012 and beyond.
The business has been acquired from the two founders and three private investors. Following the completion of the acquisition, Mackolik’s founders Erdem Yurdanur and Tarkan Onar, will remain as Chief Executive Officer and Chief Operating Officer respectively and will retain the remaining 47% of shares in the business, with the three private investors exiting. 2% of the shares will be held by an Istanbul based financial services advisory firm Odin Financial Advisors.
Oliver Slipper, joint CEO of Perform commented: “We continue to execute our strategy of augmenting our strong organic growth with selective acquisitions and are delighted to have announced the acquisition of Mackolik.
“Turkey is a hugely exciting opportunity for Perform, given the rapid growth in online advertising and internet usage and its young and growing population. Within this important geography, Mackolik is the clear market leader with a fantastic portfolio of websites and content. We are delighted to be able to welcome Mackolik to the Perform Group.”
Erdem Yurdanur, CEO of Mackolik, commented: “We are excited to be joining the Group. We believe that working with Perform will enable us to accelerate Mackolik’s development and take full advantage of the numerous opportunities present in our market, particularly in relation to sports video, editorial and data content.”
Update ahead of Closed Period
Perform remains on track to deliver strong revenue and EBITDA growth for the full year in line with the Board’s expectations. Before taking into account the positive financial benefits of the Group’s recent acquisition of the RunningBall Group, which will fall predominantly in the second half of the year, the first half / second half profile of EBITDA is anticipated to be similar to 2011, due to the seasonality of advertising spend, which is typically higher in the second half, the phasing of a number of technology and production contracts (as previously flagged) and the typical EBITDA profile of a fast growing business.
Perform will report first half results on 30th August 2012.
Turkish Lira: Sterling exchange rate of 2.8:1 assumed.
About Perform
Perform is a global market leader in the commercialisation of multimedia sports content across multiple platforms. Perform owns one of the largest portfolios of digital sports rights in the world, through contracts relating to more than 200 sports leagues, tournaments and events. The management is focused on driving profitable, organic, earnings growth through leveraging its content across new digital platforms, new products and across new geographies, taking advantage of favourable technology trends such as growth in digital media consumption and online video viewership. In April 2011, Perform floated on the London Stock Exchange.