Team Internet acquires Shinez in $42m deal

19th Mar 2024 12:29

(Sharecast News) - Digital marketing specialist Team Internet Group announced the acquisition of Shinez and its subsidiaries on Tuesday to strengthen its portfolio and presence in the online marketing sector.

The AIM-traded firm said Shinez, known for its influential content creation and distribution across various channels including social media and search engines, operates 40 popular portals such as ourfashiontrends.com and travelerdreams.com.

It said the deal, valued at an enterprise level of $41.8m on a net debt-free basis, incorporates an initial payment that represents a multiple of 4.0x Shinez's 2023 adjusted EBITDA.

Further contingent considerations could see an additional $12.3m being paid, based on Shinez achieving specific financial milestones over the coming two years.

Shinez's impact on Team Internet Group's finances was expected to boost the group's gross revenue to $948m, net revenue to $208m, and adjusted EBITDA to approximately $107m for the 2023 financial year.

The acquisition was also expected to significantly increase earnings per share in the high single-digit percentage range for the pro forma 2023 year.

Funding for the acquisition was through a combination of cash reserves and a revolving credit facility agreement, with $4.6m, or 11% of the enterprise value, held in escrow for four years to ensure coverage for customary warranties and indemnifications.

Strategically, Team Internet said the Shinez acquisition offered a number of benefits, diversifying its portfolio into high-value verticals such as lifestyle, food and travel.

It would also reduce reliance on a single monetisation network, with the acquisition expected to double the independent revenue share of the online marketing segment from 15% to 27%.

Furthermore, the merger was anticipated to bolster Team Internet's capabilities in media buying, content creation, and campaign optimisation, and unlock significant synergy opportunities, particularly with major networks like Meta.

The acquisition was expected to be finalised by late April or early May, with full consolidation into Team Internet's financials expected in the third quarter of 2024.

"This acquisition marks a pivotal transformation for Team Internet Group, seamlessly aligning with our innovative OM2 vision - omni-media, omni-monetisation," said chief executive officer Michael Riedl.

"Our vision is to establish a versatile platform that expertly guides internet users across diverse media landscapes - omni-media - and steers them towards the most effective monetisation avenues - omni-monetisation.

"The addition of Shinez's capabilities and market reach will not only diversify our revenue streams but also accelerate our growth trajectory - we are excited about the prospects this partnership brings."

At 1203 GMT, shares in Team Internet Group were up 0.3% at 135.21p.

Reporting by Josh White for Sharecast.com.