REG - Merian Chrysalis Inv - Portfolio Update

Chrysalis InvestmentsAnnouncement

01/10/2020 07:00

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RNS Number : 6940A  Merian Chrysalis Investment Co. Ltd  01 October 2020

For immediate release

 

The information contained in this announcement is restricted and is not for
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member state of the European Economic Area (other than professional investors
in the Republic of Ireland), Canada, Australia, Japan or the Republic of South
Africa.

 

Merian Chrysalis Investment Company Limited

1 October 2020

 

 

 

Merian Chrysalis Investment Company Limited (the "Company")

 

Portfolio Update

 

Update on "Target" Investment

The Company can now confirm that the "Target" investment referred to in its
announcement dated 28 September 2020 is You & Mr Jones LLC ("You & Mr
Jones").

Today, the Company is pleased to announce that is has finalised its due
diligence on You & Mr Jones and committed to invest US$60 million as part
of a US$260 million funding round.

In just five years, You & Mr Jones has established itself as one the
world's leading marketing technology groups, delivering enterprise-level
marketing technology solutions to the world's biggest brands.

You & Mr Jones was founded by David Jones and Jean-Marc Antoni who were
formerly the CEO and CFO of Havas & Havas Worldwide, one of the largest
marketing and communications groups globally. The company, which identifies
itself as the world's first "Brandtech™" group, has raised over US$500
million to date and has acquired and integrated what it believes to be
best-in-class digital and mobile technology service providers
(http://youandmrjones.com/#group) which enable brands to execute their
marketing strategies "better, faster, and cheaper".

The largest company within the You & Mr Jones group is Oliver. Oliver is
the pioneer and global leader in building in-house digital marketing
capabilities for brands. Oliver has developed a technology platform that
enables marketers to plan, create and disseminate digital campaigns
seamlessly. Given the rapidly changing face of digital marketing, this
operating system offers a significant productivity boost to clients and has
enabled some to make material cost savings.

You & Mr Jones is headquartered in New York (US), employs approximately
3,000 people across 40 countries and has made seven acquisitions and 20
strategic investments to date. Current clients include Unilever, Adidas,
Microsoft, Danone, Diageo, Reebok, Reckitt Benckiser, PayPal and Google.

Investment Thesis

Merian Global Investors (UK) Limited (the "Investment Adviser") believes that
few sectors are as ripe for disruption as the marketing and communications
sector.

In the Investment Adviser's view, the future of marketing will rely on the
expert curation of multiple service providers, combined with next-generation
marketing intelligence. It further believes that data, content and media will
need to be connected and optimised in real-time via a central technology
platform and AI.

In addition, the continued fragmentation of media and the broadening diversity
of audiences is likely to lead to an unprecedented level of complexity for
brand owners.

By building a collaborative model from the outset, the Investment Adviser
believes You & Mr Jones has designed an operating model for the future,
where multiple service providers can be utilised at ease through a core
technology platform, creating a marketplace of expertise through a single
point of contact.

Investment Rationale

You & Mr Jones:

(1)  operates in a very large market and controls only a small market share:

Total global media spend totals US$640 billion per annum and over US$260
billion of that spend is now allocated to digital channels (source: Zenith
Optimedia, 2019). Digital channel growth continues apace with other marketing
channels in structural decline. Many traditional marketing agencies appear
unable to transition their business models to adapt to the demands of
customers that are seeking digitally coherent services and infrastructure.
Companies are looking for a partner who can deliver scalable solutions that
allow them to deliver the volume of content they now need, at the speed they
need it at, at an affordable cost.

(2) provides technology and solutions that are significantly disrupting
incumbents:

You & Mr Jones leverages technology, in-housing and people-powered
marketing to enable marketers to realise material cost savings. These savings
can either be taken to the bottom line or reinvested in additional marketing
campaigns.

(3)  has displayed significant growth over many years and given barriers to
entry, has the potential to continue to do so:

You & Mr Jones generated a +27% rate of organic net revenue growth during
the first half of the year (source: Mobilemarketer.com) which the Investment
Adviser believes to be best-in-class. This is particularly impressive given
the already material revenue base and the impact of COVID-19.

(4)  has the ability to drive economies of scale through its operating model:

As brands transition from analogue to digital, You & Mr Jones is likely to
have the opportunity to create and curate an increasing level of digital
content which will drive operational efficiencies. As part of this process,
technology can be harnessed to automate the production of digital assets.

The business has also developed a proprietary technology platform that
enhances the productivity and functionality of various business units
including clients, digital asset production, pricing and distribution.

(5)  has a strong and well-respected management team

David Jones (CEO) and Jean-Marc Antoni (CFO) have an exceptional track record
and a strong reputation. They know the industry extremely well given their
senior roles at Havas, one of the world's largest media conglomerates. They
have assembled an extremely talented group of senior partners in the company.

Funding

Completion of the investment will take place in due course and it is the
Company's current intention to use the proceeds of the proposed placing of
equity, announced on 28 September 2020, to fund the investment in You & Mr
Jones. There has been a positive response so far to the Placing from both new
and existing investors.

Richard Watts, portfolio manager, comments:

"We are extremely excited to announce our investment into You & Mr Jones.
At IPO we set a target of generating significant returns on investment, and we
believe You & Mr Jones offers this possibility. We have a strong track
record of investing in media and technology assets across the Jupiter UK
small- and mid-cap desk and we firmly believe that You & Mr Jones is well
positioned to capitalise on an enormous opportunity."

Nick Williamson, portfolio manager, comments:

"You & Mr Jones fits our investment strategy and criteria perfectly. It is
a late-stage asset with a highly disruptive offering, very material revenue
streams, is profitable and has a world-class management team and client list.
This investment also diversifies our sector exposure and represents a
significant milestone, given that it is the Company's first investment outside
of Europe."

David Jones, CEO, You & Mr Jones, adds:

"We had a very strong first nine months of the year
delivering exceptional organic growth, underscoring the strength and
relevance of our technology-driven business model and the extent to which
brandtech is disrupting the traditional category. We're excited to have Merian
Chrysalis join our prestigious group of investors as we continue to
build the global leader in providing enterprise level, technology-driven
marketing solutions to the world's biggest brands"

BofA Securities acted as Introduction Agent to You & Mr Jones.

-ENDS-

For further information, please contact:

 Merian Global Investors:                     +44 (0) 20 3817 1686

 Amelie Shepherd
 Liberum Capital Limited:                     +44 (0) 20 3100 2000

 Gillian Martin / Owen Matthews
 Numis Securities Limited:                    +44 (0) 20 7260 1000

 Nathan Brown/David Benda
 Maitland Administration (Guernsey) Limited:  +44 (0) 1481 749364

 Elaine Smeja

 

LEI: 213800F9SQ753JQHSW24

A copy of this announcement will be available on the Company's website at
https://www.merian.com/chrysalis/ (https://www.merian.com/chrysalis/) .
Neither the content of the Company's website, nor the content on any website
accessible from hyperlinks on its website for any other website, is
incorporated into, or forms part of, this announcement nor, unless previously
published by means of a recognised information service, should any such
content be relied upon in reaching a decision as to whether or not to acquire,
continue to hold, or dispose of, securities in the Company.

This announcement may include "forward-looking statements". All statements
other than statements of historical facts included in this announcement,
including, without limitation, those regarding the Company's financial
position, business strategy, plans and objectives of management for future
operations (including development plans and objectives relating to the
Company's products and services) are forward-looking statements.

Forward-looking statements are subject to risks and uncertainties and
accordingly the Company's actual future financial results and operational
performance may differ materially from the results and performance expressed
in, or implied by, the statements. These factors include but are not limited
to those described in the formal Prospectus. These forward-looking statements
speak only as at the date of this announcement. The Company expressly
disclaims any obligation or undertaking to update or revise any
forward-looking statements contained herein to reflect actual results or any
change in the assumptions, conditions or circumstances on which any such
statements are based unless required to do so by the Financial Services and
Markets Act 2000, the Listing Rules or Prospectus Regulation Rules of the
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