LONDON, UK: Ebiquity plc, a world leader in media investment analysis, announced the proposed acquisition of Media Management LLC (MML), a US-focused media audit specialist, for an initial consideration of £6.1 million with a deferred consideration element payable in 2025. Ebiquity Inc., US subsidiary of Ebiquity plc, will acquire MML.
Media Management LLC (MML) is a US-based media audit company providing clients with transparency and accountability of their media investments, and agency performance validation, founded in St Louis, Missouri in 1995 by Thomas Bridge.
MML uses a proprietary circle audit technology that enables it to analyse 100% of its clients’ “media buy” data from all major “media buy” management platforms.
MML has a 40-person team centred in St Louis and distributed across the US. The company has a high-quality client roster that includes Geico, GM, AT&T, AstraZeneca and Samsung with average client tenure of 11 years. The founder and current chief executive officer of MML, Thomas Bridge (the “Founder”), will remain with the business and join Ebiquity’s North American management team.
In the financial year ended 31 December 2021, MML’s revenue grew c.29% year-on-year to £5.4 million and it made an improved operating profit of £0.7 million with operating profit margin of 13.4%2. As at 31 December 2021, MML had gross assets of £1.8 million2.
Acquisition rationale
Ebiquity Board believes that there is a strong strategic and financial rationale for the MML Acquisition. The acquisition of MML and its complementary service offering would add scale to Ebiquity’s business in the US, the world’s largest advertising market. MML’s client roster of blue-chip American corporates will create significant cross-sell opportunities in the US for the enlarged group. MML’s strong automation practices will improve operating efficiencies and drive realisable cost synergies.
The Ebiquity Group’s business in the US would also be immediately scaled with revenue of £10.7 million in the financial year to 31 December 2021 on a pro forma basis4.
The MML integration will be managed by Ebiquity’s US management team headed by Paul Williamson (MD of Ebiquity’s current North American business) and Thomas Bridge (founder and current CEO of MML).
The acquisition is being effected by an agreement dated 29 March 2022 between Ebiquity, Ebiquity Inc. (the Company’s US subsidiary), MML, Bridge Media Services Inc. (held by the Founder and his closely associated persons, together with Bridge Media Services Inc., the “MML Vendors”) and the MML Vendors (the “MML Acquisition Agreement”).
The initial consideration element for the MML Acquisition is £6.1 million payable in cash on completion. Of the £6.1m initial consideration, the 16% (c.£1.0 million1) of the cash has been applied by the MML Vendors to subscribe for 1,737,261 new Ordinary Shares of Ebiquity.
Under the MML Acquisition Agreement, the MML Vendors will hold 1,737,261 MML Shares following the completion of the MML Acquisition.
The deferred consideration element for the MML Acquisition will be payable in 2025 based on 1.0x of reported 2024 adjusted earnings before interest and tax of the combined Ebiquity US and MML businesses which is expected to be at least £3.0 million payable in cash of which the MML Vendors will apply 20% to subscribe for Ordinary Shares, which will be calculated (rounded down to the nearest whole number) by reference to the middle market quotations for the Ordinary Shares as shown by the AIM Appendix of the Daily Official List of the London Stock Exchange for the five Business Days prior to the date the deferred consideration is agreed between the parties. The Company expects to have sufficient cash headroom in 2025 to satisfy the deferred cash consideration for MML.
Under the MML Acquisition Agreement, the MML Vendors have undertaken, save in limited circumstances, not to dispose of any of their interests in the New Shares at any time prior to the 18-month anniversary of the date of their issue. In addition, in order to ensure an orderly market in the Ordinary Shares, the MML Vendors have further undertaken they would not, save in limited circumstances, deal or otherwise dispose of any such interests in the New Shares other than through Panmure Gordon (or such other broker appointed by the Company from time to time).
The MML Acquisition has been financed through the Company’s existing cash resources and the MML Shares will be issued under existing Shareholder authorities. The MML Acquisition will complete conditional on admission of MML Shares to trading on AIM.
Nick Waters, Chief Executive Officer of Ebiquity, said: “This represents an exciting move for us to scale our North American business. MML brings a team of experienced and highly skilled media specialists, complementary capabilities, an outstanding patented technology platform in Circle Audit, and a roster of high-quality blue chip American clients. The combination of Ebiquity and MML unlocks strong potential for the business, and significantly advances and scales our business in the US, the world’s largest advertising market.”
Thomas Bridge, Founder and current Chief Executive Officer of MML, said: “MML is excited to join the Ebiquity family, expanding our coverage domestically & internationally for our clients. This step further reinforces MML’s commitment to our team and our clients in continuing our work in driving third-party media accountability.”
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