REG - Digitalbox PLC - Acquisition of assets from Social Chain AG

DigitalboxAnnouncement

01/08/2023 07:00

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RNS Number : 8140H  Digitalbox PLC  01 August 2023

1 August 2023

Digitalbox plc

("Digitalbox", the "Company" or the "Group")

 

Acquisition of the assets of Media Chain Group Limited

Digitalbox plc (AIM: DBOX), the mobile-first digital media business, which
owns Entertainment Daily, The Daily Mash, The Tab, and The Poke is pleased to
announce it has exchanged contracts (the "Exchange") to acquire the digital
assets of 99 Problems, Student Problems and The Life Network Shopping from
Media Chain Group Limited (part of "Social Chain AG") for a total
consideration of $800,000 (the "Consideration", together the "Acquisition").
The Acquisition is subject to completion of satisfactory testing by
Digitalbox, as set out below, and is expected to be immediately earnings
enhancing on completion.

 

About Media Chain Group Limited

 

Media Chain Group Limited was previously part of the broader Social Chain
business established in Manchester in 2014. Social Chain became part of The
Social Chain AG business in 2019 and operated in two divisions, an agency that
was sold in the spring of 2023 and the media division (Media Chain Group
Limited) that houses 20+ social pages with over 60m followers.

 

The Acquisition

 

The transaction provides Digitalbox with the opportunity to extend its
audience reach through the 99 Problems 10m Facebook followers, Student
Problems 1.4m Tik Tok followers and the The Life Shopping Network 1m Facebook
followers. The combined follower bases will more than double the number
currently owned by Digitalbox at approximately 8m Facebook followers.

 

Completion of the Acquisition is conditional upon the satisfactory testing, by
Digitalbox, through a licence agreement which is in operation until the end of
November 2023. The total Consideration for the Acquisition to be paid is
$800,000, with $79,000 payable immediately on Exchange as a non-refundable
deposit to trigger the license term through a single $1,000 fee, and a further
$720,000 payable on completion - which is anticipated to be within two to five
months from the date of Exchange - through a deferred payment of $520,000 in
cash and $200,000 in Digitalbox ordinary shares ("Completion").

 

The Consideration will be funded from the Group's existing cash resources,
which at 28 July 2023 were approximately £2.4 million. The Acquisition is
being undertaken via Digitalbox Publishing Limited, which is wholly owned by
the Company.

 

The Acquisition is expected to be immediately earnings enhancing at the point
the Digitalbox management team choose to advance to Completion.

 

James Carter, CEO, Digitalbox, said: "The opportunity to acquire some of the
Media Chain Group assets is an excellent way for us to explore significantly
extending the audiences currently being served by the Digitalbox brands. With
99 Problems having started life as a social page called Student Problems, we
believe there are plenty of synergies to build around The Tab whilst there is
very strong common ground between Entertainment Daily's audience and those who
follow The Life Shopping Network. The management team will get to work
straight away on proving this case before Completion."

 

Christian Grobel, CEO, Media Chain Group Limited, said: "We are pleased to be
offering these assets to a great home. The audience bases we have built will
complement the Digitalbox portfolio and benefit from the Company's talented
editorial departments. We wish them the best of luck with the next stage of
development for their brands."

 

END

 

Market abuse regulation: This announcement contains inside information for the
purposes of Article 7 of Regulation (EU) No 596/2014 as it forms part of UK
domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR").

Enquiries:

 Digitalbox                                                  c/o SEC Newgate
 James Carter, CEO

 Panmure Gordon                                              Tel: 020 7886 2500

 (Nominated Adviser, Financial Adviser & Joint Broker)
 James Sinclair-Ford (Corporate Advisory)
 Rupert Dearden (Corporate Broking)

 Leander Capital Partners (Joint Broker)                     Tel: 020 7195 1400
 Alex Davies / Hugh Kingsmill Moore

 SEC Newgate (Financial Communications)                      Tel: 07970 664807
 Robin Tozer / Moly Gretton                                  digitalbox@secnewgate.co.uk

 

About Digitalbox plc

 

Based in the UK, Digitalbox is a 'pure-play' digital media business with the
aim of profitable publishing at scale on mobile platforms.

Digitalbox operates the trading brands of "Entertainment Daily", "The Daily
Mash", "The Tab", and "The Poke".

Entertainment Daily produces and publishes online UK entertainment news
covering TV, showbiz and celebrity news. The Daily Mash produces and publishes
satirical news content. The Tab is the UK's biggest youth culture site
fuelled by students.  The Poke expertly curates and editorialises the
funniest content from around the web and social media.

Digitalbox primarily generates revenue from the sale of advertising in and
around the content it publishes. The Company's optimisation for mobile enables
it to achieve revenues per session significantly ahead of market norms for
publishers on mobile.

 

 

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