REG - Zinc Media Group PLC - Zinc Media Group Acquisition of Raw Cut

Zinc MediaAnnouncement

30/10/2024 07:00

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RNS Number : 1488K  Zinc Media Group PLC  30 October 2024

30 October 2024

Zinc Media Group plc

("Zinc Media" or the "Company")

Zinc Media Group Acquisition of Raw Cut

 

Zinc Media Group plc (AIM: ZIN), the award-winning television, brand and audio
production group, is pleased to announce the acquisition of Raw Cut Ventures
Ltd, which owns Raw Cut Television, Raw Cut Distribution, and Tomas TV a
leading independent television production and distribution company for an
initial net consideration of £1.0m to be satisfied by the issue of 1,541,622
Zinc new ordinary shares ("Ordinary Shares") (the "Acquisition").

 

Application has been made for the 1,541,622  new Ordinary Shares to be
admitted to trading on AIM. It is expected that the dealings in these new
Ordinary Shares will commence on 4 November 2024. The new Ordinary Shares will
rank pari passu with the existing Ordinary Shares.

 

Raw Cut, founded in 2002, is the UK's market leader in 'Blue Light'
programming, producing popular returning series such as Road Wars and Police
Interceptors. In addition, Raw Cut is known for its critically acclaimed True
Crime, History, and Feature Documentaries for leading streamers and
broadcasters including Netflix, ITV, Channel 4 and Channel 5. It has long
standing, trusted relationships with the UK's police and emergency services,
built over decades, which are integral to its ongoing success.

 

Raw Cut operates from production bases in London and Cardiff, with its
international distribution division based in London. The acquisition expands
Zinc's geographical footprint into Wales, with Zinc now operating across all
UK regions and nations, including Scotland and Northern Ireland. This enhanced
regional presence strengthens Zinc's ability to produce diverse, impactful
stories from across the UK. The acquisition also enhances Zinc's distribution
and IP catalogue.

 

In the year ended 31 December 2023, Raw Cut delivered £4.4m revenue, had a
profit before tax of £0.4m and had net assets of £1.6m. For the year ended
31 December 2024 Raw Cut is expecting to deliver £4.6m of revenue and profit
before tax of £0.5m.

 

The initial consideration is £1.0 million payable in Zinc Ordinary Shares. In
addition Zinc is acquiring Raw Cut with an agreed normalised working capital,
with any additional net cash paid for in cash at completion on a
pound-for-pound basis. Up to an additional £5.5m of contingent consideration
is payable if Raw Cut achieves an EBITDA growth target from £0.5 million at
the time of Acquisition to £1.3 million on average in FY25 and FY26 (the
"Earn Out"). Payments relating to the Earn Out will paid in either Zinc
ordinary shares and/or in non-interest bearing loan notes (to be redeemed by
the relevant noteholder no earlier than 6 months after their issue), in each
caseat the Board's discretion.

 

The acquisition of Raw Cut supports Zinc's wider M&A strategy of
accelerating growth and enhancing capabilities to deliver world-class
television across broadcasters, streaming platforms, and digital channels
globally.

 

Lock-in Agreement

 

Shareholders Mr Stephen Warr and Mrs Sandra Warr have both entered into
lock-in agreements with the Company. Under the terms of the lock-in agreement,
Mr Stephen Warr has undertaken to the Company not to dispose of any interest
in any Ordinary Shares owned by him for twelve months from Admission. Mrs
Sandra Warr, who will be retiring from the business at completion, has
undertaken to the Company not to dispose of any interest in any Ordinary
Shares owned by her for six months from Admission, and during the subsequent
six month period only to dispose of any interest with the prior written
consent of the Company.

 

Total Voting Rights

 

Following Admission, the Company will have a total of 24,345,022 Ordinary
Shares in issue. The Company does not hold any shares in treasury. Therefore,
this figure may be used by shareholders as the denominator for calculations by
which they will determine if they are required to notify their interest in, or
a change to their interest in, the Company under the FCA's Disclosure Guidance
and Transparency Rules.

 

Commenting on the Acquisition, Mark Browning, CEO of Zinc Media Group, said:

'This acquisition follows the sale announced earlier this month of our loss
making non-core publishing business and brings in a larger, profitable and
core television business to the Group.  We are thrilled to welcome Raw Cut
into the Zinc Media Group. Their expertise in producing high-quality 'Blue
Light' and documentary programming aligns perfectly with our vision for
world-class factual content. This acquisition not only enhances our production
capabilities but also solidifies our presence across all UK regions, and
enhances our IP and distribution potential'.

 

 

For further information, please contact:

 

Zinc Media Group
plc
+44 (0) 20 7878 2311

Mark Browning, CEO / Will Sawyer, CFO

www.zincmedia.com (http://www.zincmedia.com/)

Singer Capital Markets (Nominated Advisor and Broker)
   +44 (0) 20 7496 3000

James Moat / Sam Butcher

MHP

Oliver Hughes / Eleni Menikou / Ollie
Hoare
+44 (0) 7817 458804

 

About Zinc Media Group

Zinc Media Group plc is a premium television and content creation group.

The award-winning and critically acclaimed television labels comprise Brook
Lapping, Red Sauce, Supercollider, Tern Television, Rex and Atomic, along with
Bumblebee Post Production, and produce programmes across a wide range of
factual genres for UK and international broadcasters.

The Edge Picture Company produces film content for brands and corporates in
the UK, Qatar and other international markets.

For further information on Zinc Media please visit www.zincmedia.com
(http://www.zincmedia.com/)

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