Xlmedia Regulatory News (XLM)

2 September 2021

XLMedia PLC

("XLMedia" or the "Group" or the "Company")

Acquisition of business and assets of Saturday Football Inc.

US$24 million acquisition of highly complementary quality US sports assets

XLMedia (AIM: XLM), a leading global digital performance publisher, announces the acquisition of the business and assets of Saturday Football Inc., a major online publisher of college football news for a total consideration of US$23.0 million cash (c.£16.8 million) plus US$1.0 million (c.£0.7 million) in long term incentive shares (the "Acquisition").

Founded in 2014, Saturday Football Inc. operates two leading college football media sites, saturdaydownsouth.com and saturdaytradition.com, which cover the popular Southeastern Conference ("SC") and Big 10 college sports conferences. Combined, the sites generate an audience of approximately 10 million visits per month.

XLMedia will pay an upfront consideration of US$11.0 million in cash plus an additional US$12.0 million, payable over three years. In addition, the founders, who are remaining with the business, will receive US$1.0 million in long-term incentive shares of XLMedia as detailed below. The Acquisition will be funded from XLMedia's existing cash reserves.

The acquisition of Saturday Football Inc. follows the acquisitions of Sports Betting Dime and CBWG Sports ("CBWG") which, when combined, significantly strengthen XLMedia's position in the fast-growing US sports market. The addition of Saturday Football Inc to XLMedia's portfolio will create significant cross marketing opportunities for the wider Group and provides good reach across the South and Midwest States, including markets yet to legalise sports betting.

The Acquisition accelerates XLMedia's strategy to operate content rich websites across attractive growth geographies, and is expected to deliver the following key benefits:

· Enables the Group to access the sizable US College Football marketplace, which is highly complementary to XLMedia's existing US sports vertical

· XLMedia will seek to leverage Saturday Football Inc.'s key brand sponsorships, in addition to benefiting from established social media, video and content production, and programmatic AdTech capabilities

· The Acquisition is the conversion of an existing agency partnership between XLMedia and Saturday Football Inc. which was established in December 2020, during which time a close working relationship with management has generated a number of revenue opportunities

· The Acquisition progresses the Company's strategy to increase its exposure to high growth regulated markets, particularly in the US and significantly strengthens the Company's position in US sports betting

· The Saturday Football Inc. business is profitable and growing

Information of Saturday Football Inc.

Saturday Football Inc. - an agency partner of XLMedia's since December 2020 - is an online publisher for college sport news, with its websites focused on two key regions: the South through its saturdaydownsouth.com site and the Midwest via saturdaytradition.com.

Saturday Football Inc. employs approximately 10 full time employees and 55 contractors, providing skills and capabilities in marketing, content production, search engine optimisation and technology development.

Through the due diligence process, XLMedia management have estimated the owned sites generated unaudited revenue and EBITDA, before founders' compensation, over the trailing 12 months ending 31 July 2021, of approximately $2.5 million and approximately $606,000 respectively. Management believes that post integration into the Group the assets will generate significantly more revenue due to closer collaboration with CBWG.

Notice of Results

Management will provide a full update on the Group's performance in the interim results, to be announced on Thursday 23 September 2021.

Stuart Simms, Chief Executive Officer of XLMedia, commented:

"We are delighted to be acquiring Saturday Football Inc., cementing an already extremely productive working relationship. Over the last twelve months we have got to know the business very well and have been hugely impressed with their team, their systems and most importantly their market reach. 

"This transaction provides additional operation depth and reach to our sports footprint which we believe is fast becoming a significant growth driver for our business.

"With the forthcoming US College Football season about to commence, the timing of this transaction couldn't be better with our growing US presence ideally positioned to further support the team at Saturday Football Inc."

Ken Dorward, XLMedia Head of North America, added:

"We are thrilled to be delivering on XLMedia's strategic vision for Americas sports, and look forward to welcoming the Saturday Football Inc. team, who really complement our existing portfolio as we pursue this once in a generation US opportunity."

Transaction details

The aggregate approximate consideration will be US$24 million (c. £17.5 million) made up of:

· US$11 million initial cash consideration payable upon completion;

· US$4 million deferred consideration payable on the first anniversary;

· US$4 million deferred consideration payable on the second anniversary;

· US$4 million deferred consideration payable on the third anniversary; and

The three founders of Saturday Football Inc., Mr Josh Gates, Mr Kevin W. Duffey and Mr Jonathan T. Cooper, are being retained in the business. The founders will be granted nil cost share awards in the Company under the 2020 Global Share Incentive Plan with a value of $333,333.33 each. These share awards will become fully vested on the fourth anniversary of the date of the grant, subject to meeting performance conditions and other criteria, and a further two year holding period.

This announcement contains inside information for the purposes of the UK version of Article 7 of Regulation (EU) 596/2014 ("MAR").

For further information, please contact:

Notes:

XLMedia is a global digital performance publisher. Operating across a variety of verticals including online gambling, personal finance, sports and technology, the Group uses proprietary tools and methodologies to identify and target high value clients for platform operators.

XLMedia has a clear transformation strategy, which will enable it to shape the future of the performance publishing industry. The Company has set out a clear strategic agenda under two fundamental priorities:

· A balanced portfolio of online assets

o XLMedia seeks to create a balanced portfolio of websites to cover a range of attractive geographies, both stable and high-growth verticals and with greater exposure to regulated markets. In doing so, the Company will focus particularly on developing presence in North American sports, primarily through targeted acquisition.

· Branded, content-rich, engaging websites

o XLMedia will consolidate its online portfolio, concentrating on a much smaller number of publishing assets, and focusing its resources on optimising this core set of premium sites for its chosen markets. These content-rich, engaging websites, underpinned by intelligent market-leading technology, will seek to build stronger lasting relationships with consumers and enhance monetisation opportunities.