Leading Australian Media Services Company Brand New Media Acquired for $12.2 Million -=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-
3rd September, Sydney; Australia’s largest independent digital media company, destra Corporation Limited (ASX:DES), announced today it was entering into an agreement to acquire Brand New Media (BNM) for $12.2 million. Brand New Media is an Australian market leader in advertising media representation and a producer of brand-funded content and events.
Destra CEO, Domenic Carosa said destra’s acquisition of Brand New Media was part of its commitment to building an online media representation business to develop advertising revenue streams across its current internet websites, including its music and video properties, as well as to represent the advertising interests of other external websites.
“Brand New Media brings a wealth of experience in electronic media and brand funded content to the destra Group. Our combined online expertise positions us in the two fastest growing advertising sectors; the internet and subscription TV.
“Destra is committed to capitalising on the advertising revenue opportunities offered online, with the Australian online advertising market projected to grow by 50% in 2006 alone. In 2006, online advertising revenue topped $195 million in the first quarter – traditionally the slowest quarter for ad growth. With this rate of growth, we could expect to see 2006 online expenditure approaching $1 billion. By 2010, the Australian online advertising market is projected to be worth $1.8 billion or 13.1% of total advertising revenue.”
Destra Chairman, Carl Olsen, said, “Brand New Media is a natural fit for destra with its strong content offering and large multi-media audiences.
“We believe television is a highly complementary platform to online, allowing us to build digital communities. Online music is a proven drawcard for key advertising audience demographics. We intend to capitalise on the advertising potential offered by our ‘hard-to-reach’ online audiences.”
BNM reported an EBIT (Earnings Before Interest & Tax) Profit of over $2m on media billings of $25m for the FYE 30 June, 2006.
BNM is an Australian market leader in integrated advertising sales and marketing BNM Business divisions include; BNM Media Sales Subscription television: Movie Network channels; FashionTV; Expo/TVSN, CNBC, Aurora and Ovation. International TV: TVNZ, Star Group, ESPN Star Sports and Phoenix.
Online; TVNZ.co.nz, expochannel.com.au, StarTV.com, ESPNStarSports.com, MovieNetwork.com.au and FTV.com
Out of Home; Virgin Blue in-flight media and The Retail Network.
BNM Publishing; Do it magazine.
In addition BNM Live produces brand funded content and events for distribution across a range of media platforms. Its content assets include PlanetX winter and summer games, King Gees Jack of All Trades, Freshstyle, Xpress, Salt TV and Film Zone.
Brand New Media CEO, Perry Smith said “Brand New Media has experienced rapid growth due to the strength of our sales, marketing and content business. The combined assets of BNM will complement the overall destra Group offering. This deal provides Brand New Media with the resources to grow our digital offering to media partners. The integration of destra’s digital assets and technology will ensure BNM continues to meet the changing needs of the Australian advertising market.”
Brand New Media will continue to operate as an individual entity with its own governance structure within the broader destra Group. The senior management team of Brand New Media remains unchanged:
Destra has agreed to acquire 100% of Brand New Media Pty Ltd on an earn-out basis. This is comprised by -
1. An initial consideration of $7.66 million including;
- $5,000,000 cash; and - $2,660,000 worth of Destra shares priced at 28 cents
2. An earn-out structure providing for a Tranche Payment of $3.0m adjusted depending on actual EBIT growth for the 2007 and 2008 financial years.
Funding for this transaction has been secured through a debt facility from St George Bank Corporate and Business Banking. The remaining items necessary to complete this transaction are expected to be finalised within two weeks.
Additionally, destra’s domain names management business TPP was sold in a management buy-out for $800,000 cash. TPP represented approximately 3% of destra Group sales. Destra continues to operate its hosting and communication (digital infrastructure) business, destra Business.
Destra Corporation requested a trading halt on Friday, 1 September 2006 to finalise the acquisition. The trading halt will be lifted before the open of trading on Monday, 4 September 2006.
DES Price at posting:
0.0¢ Sentiment: Buy Disclosure: Not Held
