Social media marketing firm acquired at up to 41.6x operating profit
Fri, 03 Feb 2023 | BUSINESS SALE
Manchester-based social media and influencer marketing agency Social Chain has been acquired by social and digital media firm Brave Bison in a deal that could rise to £17.2 million. Brave Bison will pay an initial consideration of £7.7 million for Social Chain’s entire issued share capital, with an additional contingent consideration of up to £9.5 million payable over three years based on EBITDA performance targets.
If the full consideration is reached, the acquisition would represent around a 41.6x multiple of Social Chain’s operating profit of £413,067 for the year ending December 31 2021. During that period, the company reported turnover of £9.57 million and registered a post-tax profit of £369,424. At that time, the company’s net assets totalled £2.31 million.
Social Chain was founded in 2014 by entrepreneur Steven Bartlett, who stood down as company director in 2020 and has since achieved fame with his Diary of a CEO podcast and on the BBC’s Dragons Den. The company creates influencer-based social media marketing campaigns for a range of major brands, with clients including Amazon, TikTok and KFC. In addition to its Manchester base, the firm has offices in London and New York and an employee headcount of 122.
Brave Bison forecasts that Social Chain is set to meet or exceed market expectations for the year ended December 31 2022. Social Chain’s revenue is expected to grow more than 30 per cent year-on-year to £13.8 million, with net cash set to stand at around £6.2 million at year end and the company anticipated to report a £100,000 adjusted EBITDA loss.
The deal is expected to increase Brave Bison’s social media advertising revenues to £15 million (a seven-fold increase on current figures) and the combined businesses are forecast to generate total revenues of more than £40 million in the year ending December 31 2023.
Brave Bison Chairman Oliver Green said: "We've long admired Social Chain, which we believe is among the world's best regarded social media and influencer marketing brands, and we're excited by the highly relevant clients it brings into our business. Social Chain has huge potential for growth within Brave Bison, taking the momentum Pete and the team have built up using Steven Bartlett's platform.”
Brave Bison Chief Growth Officer Theo Green added: "This strategic acquisition strengthens our position in the social media advertising space and gives Brave Bison a foundational office in the US. My brother and I are delighted to be participating in this placing, and we remain on the lookout for opportunities in the digital media, digital advertising and technology services ecosystems."
Post-acquisition, Social Chain will merge with Brave Bison Social & Influencer, with the enlarged practice to be headed by Social Chain’s current CEO Pete Metcalfe.
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