REG - LBG Media PLC - Acquisition of Betches Media

LBG MediaAnnouncement

18/10/2023 07:00

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RNS Number : 4454Q  LBG Media PLC  18 October 2023

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law,
by virtue of the European Union (Withdrawal) Act 2018 - for immediate
release.

 

 

18 October 2023

 

LBG Media plc

 

("LBG Media", or the "Group")

 

Acquisition of Betches Media, LLC

 

Step-change acquisition significantly accelerates growth and presence in the
key US market

 

LBG Media, the owner of the global leader in youth publishing LADbible Group,
is pleased to announce the acquisition of Betches Media, LLC ("Betches", or
the "Acquisition") a US-based media brand founded by women and focussed on
digital media content production and publication for women. The Acquisition is
for an initial cash consideration of $24 million, funded from existing cash
resources, with up to a further $30 million cash consideration payable in
instalments, subject to Betches achieving certain revenue and profitability
targets to 2026.

 

Acquisition highlights:

·      Acquisition of a complementary, high growth US digital publisher
with a focus on millennial and Gen Z women.

·      Step-change addition to the Group, in line with stated M&A
ambitions, materially expanding its reach and footprint in the US, the world's
largest advertising market.

·      Significant additional revenue and Adjusted EBITDA contribution.
Funded through existing cash reserves, the Acquisition will be highly
accretive.

·      Major new brands added to the portfolio, new capabilities
unlocked and improved revenue diversification.

·      Expansion of both LBG Media's existing 100 million US following
as well as its overall audience of women.

·      Clear potential for cross-selling opportunities.

 

About Betches

Established in New York in 2011 by three female co-founders, who are all
remaining with the business post-Acquisition, Betches is a high growth,
cash-generative, and profitable business, where 92% of revenue is Direct and
derived primarily from long-term recurring partnerships with blue-chip brands.
With approximately 32 million followers(1), Betches has a highly engaged
following and delivers its unique perspective through social, branded
partnerships, live-events, merchandise, podcasts and newsletters. Women
represent approximately 86% of its overall audience, engaging with brands that
are focused on passion points such as moms, brides, travel, relationships and
humour.

 

In the year ended 31 December 2022, Betches generated over $14.6 million of
revenue (unaudited) and delivered $3.9 million Adjusted EBITDA, representing a
margin of approximately 27%, having grown revenues by 44% on the prior year.

 

Strategic rationale

The US represents the worlds largest advertising market. As well as enhancing
the Group's existing Direct revenue stream, LBG Media's existing brands will
benefit from the additional capabilities and revenue channels that Betches
brings, including podcasts and newsletters. The Acquisition enables LBG Media
to accelerate its presence and understanding of the North American market,
while developing deeper relationships with US brands and agencies.

 

Betches will remain a stand-alone business, but will work with LBG Media's
existing US team to develop larger direct brand partnership opportunities that
can span LBG Media and Betches brands and audiences. This announcement builds
on the successful acquisition of UNILAD in 2018, another US-focused publisher,
and the Group continues to evaluate acquisition opportunities with the
intention of building capabilities and/or expanding geographic reach.

 

Solly Solomou, CEO at LBG said:

"The joining of LBG Media and Betches is an incredibly exciting milestone in
the Group's story, progressing a key element of the strategy that we set out
at the time of IPO, and since. This deal brings together two highly
successful, growth-focused businesses with complementary brands and skills,
similar cultures and amazing teams, to create a world-class proposition. The
opportunity for the enlarged group is exciting, as we will be better
positioned to capitalise on the significant US audience and advertising
market. I look forward to welcoming the Betches team to LBG Media."

 

Aleen Dreksler, CEO at Betches said:

"It's a very exciting day in the history of Betches as we begin this next
chapter with LBG Media, a highly influential media owner with massive global
reach. Betches has been on the cutting edge of women's media and disrupting
internet culture in the US for over a decade, and this acquisition will enable
us to achieve new heights in our global footprint, new original programming,
brand partners, and much more. The synergy between LBG and Betches is
unmatched, with our similar origin stories and passion for connecting with
millennial and Gen Z audiences, making this a natural next step for our
company. We remain committed to our ambition to be the number one humour
platform for women globally and are confident that the legacy we have built
for Betches will continue to thrive with the newfound support of LBG Media and
its leadership."

 

(1) Followers includes social media followers, as well as subscribers to both
podcasts and newsletters.

 

For further information please contact:

 

 LBG Media plc                                              investors@ladbiblegroup.com

Solly Solomou, Co-founder & CEO

 Richard Jarvis, CFO

 Mark Mochalski, Investor Relations

 Fiona O'Nolan, Investor Relations

 Zeus Capital Limited                                       Tel: +44 (0) 161 831 1512

(Lead Financial Adviser, Nominated Adviser and Broker)    www.zeuscapital.co.uk (http://www.zeuscapital.co.uk/)

Dan Bate / Nick Cowles (Investment Banking)

 Kieran Russell / Daniel Phillips (Lead Financal Adviser)

 Benjamin Robertson (Equity Capital Markets)
 Peel Hunt LLP (Joint Broker)                               +44 (0) 20 7418 8900

 Neil Patel                                                 www.peelhunt.com (http://www.peelhunt.com/)

 Paul Gillam

 Richard Chambers
 Media enquiries                                            Tel: +44 (0) 20 7466 5000

Buchanan                                                  lbgmedia@buchanan.uk.com (mailto:lbgmedia@buchanan.uk.com)

Richard Oldworth / Chris Lane / Toto Berger / Jack Devoy

Notes to editors

LBG Media is a global, multi-brand, multi-channel digital youth publisher and
is a leading disrupter in the digital media and social publishing sectors. The
Group produces and distributes digital content across a range of media
including video, editorial, image, audio, and experience (virtual and
augmented reality). Since its inception in 2012, the Group has curated a
diverse collection of specialist brands using social media platforms
(primarily Facebook, Instagram, Snapchat, Twitter, YouTube and TikTok) and has
built multiple websites to reach new audiences and drive engagement. Each
brand is dedicated to a distinct popular interest point (e.g. sport, gaming
etc.), which is designed to achieve broader engagement, increase relevance and
ultimately build a loyal community of followers.

 

The Group operates two core routes to market: Direct revenue, which is
principally generated from the provision of content marketing services to
corporates, brand owners, marketing agencies and other entities such as
government bodies and where the relationship with the client is held directly
by LBG Media; and Indirect revenue, which is generated via a third party, such
as a social media platform or via a programmatic advertising exchange / online
marketplace, which holds the relationship with the brand owner or agency.

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