QMS spending $37m to acquire sport businesses TLA and Stride

• QMS Sport will invest A$32.7 million to acquire 100% of both TLA and Stride.

QMS Media is to acquire a 100% interest in the TLA Worldwide (Aust) and TLA – ESP Limited (UK) (together, TLA) and, in turn, Stride Sports Management (Stride) businesses. 

QMS Media Group CEO and managing director Barclay Nettlefold said: “The TLA and Stride acquisitions represent the next step in the development of QMS Sport as a global integrated sports platform.

“These acquisitions provide QMS Sport with an enhanced service offering that together creates a unique vertically integrated sports advertising platform; leveraging the strength of their respective strategic relationships with both domestic and international clubs, agencies and rights holders to broaden client service offerings and grow collective revenue streams.”

Transaction overview

• QMS Sport will invest A$32.7 million to acquire 100% of both TLA and Stride.
• On a 12-month pro-forma basis, the acquisitions are expected to contribute CY2019 EBITDA of ~ A$6.0 million pre-synergies.
• Synergies of between $1-2 million per annum are expected to be realised by the end of CY2020.
• TLA and Stride acquisitions are expected to be EPS accretive in CY2019 at an EV/EBITDA multiple of 5.3x.
• TLA and Stride are talent representation and sports marketing groups with a diverse client base of sporting talent across AFL, cricket, netball, Olympic sports and media talent throughout Australia and the UK.
• Sports marketing competencies include PR, client activation, content creation, social media consultancy, graphic design, and sports consultancy.
• Dedicated sports merchandise business specialises in membership fulfilment for many of Australia’s leading sporting franchises, including a dedicated grass roots sports apparel business in partnership with global sports brand PUMA, an event merchandise business as well as a wholesale business.
• The transaction is subject to customary conditions, including financing conditions precedent and shareholder approval of the TLA parent company, and is expected to complete within 30 days.

Nettlefold added: “Our vision is to develop QMS Sport as a global integrated sports platform with digital sports technology, infrastructure, media rights, talent management and merchandise under one major sports offering, providing advertisers, sponsors and brands with a unique and powerful platform to engage with this highly valued sports audience. The relationships TLA and Stride have with key sporting codes, clubs and talent will be beneficial in delivering new revenue streams both locally and internationally.”

Craig Kelly, CEO of TLA said: “We are thrilled to become a part of the QMS group, a business that shares our passion for sport and has a vision for a global sports platform to capitalise on the continued growth of the sector. Our new combined offering will make it easier for clients to access the highly engaged sporting fan like never before.”

Transaction Funding

The acquisitions will be funded in part via a private placement of unlisted fully paid ordinary shares in QMS Sport to institutional and sophisticated investors to raise approximately A$12 million. E.L. & C. Baillieu Limited (EL&C Baillieu) are acting as lead managers to the private placement.

The balance of the purchase price will be funded via a short-term bank financing facility, which will be repaid in CY2020.

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