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Somewhere in the UK there is a CEO who is smiling. Actually, there are two of them. Simon Denyer and Oliver Slipper, Joint CEOs of Perform Group plc (LSE:PER), are likely the envy of UK publicly traded companies. Perform’s 12 month stock chart looks like a trail to the top of Everest as it has steadily climbed throughout the year from 150.00 pence on 18 August 2011 to 385.00 at midday today, 29 June 2012.
£14.6 Million Buys Initial 51% Stake
Perform announced this morning that they have begun a total acquisition process with the initial purchase of a 51% stake in the Turkish company Mackolik Internet Hizmetleri Ticaret A.S. The acquisition further expands the geographic footprint of Perform’s core business of delivering much-wanted content to avid sports fans. The £14.6 million cash deal to acquire majority ownership will culminate with the purchase of the remaining 49% stake in March 2016. The actual amount to be paid, both initially and ultimately, will be determined by EBITDA performance formulae applied to both ends of the agreement. The total purchase price is capped at £75 million.
Turkish Trivia & Mackolik’s Market
Mackolik is the leader in the Turkish digital sports media market, making it a perfect fit with Perform’s strategy of growth through acquisition of “local champions” whose businesses can be readily enhanced by the addition of the inherent benefits that Perform brings to the table. Mackolik operates ten websites, two of which are Turkey’s most visited online sports sites, mackolik.com and sahadan.com. The user rates of these two sites alone increased by factors of 37% and 23% respectively during the first five months of 2012 in a year-on-year comparison with 2011. As of its fiscal year end at 31 December 2011, the company had revenues of £2.4 million and assets of £1.4 million.
Turkey is the sixth largest economy in Europe and Europe’s fastest growing digital marketplace. It has the second largest population of any European country and over half that population is under the age of thirty. There are currently thirty million active internet users and 21 million mobile 3G users in Turkey.
Executive Perspectives
Mackolik CEO, Erdem Yurdanur, said that, “We believe that working with Perform will enable us to accelerate Mackolik’s development and take full advantage of the numerous opportunities present in our market, particularly in relation to sports video, editorial and data content.”
Joint CEO of Perform, Oliver Slipper, observed that “We . . . are delighted to have announced the acquisition of Mackolik. Turkey is a hugely exciting opportunity for Perform, given the rapid growth in online advertising and internet usage and its young and growing population. Within this important geography, Mackolik is the clear market leader with a fantastic portfolio of websites and content.”
More Good Things to Come
Closing out their press release this morning, Perform announced that it will publish its first half results on 30 August 2012 and further noted that the company will be reporting strong revenue and EBITDA growth in line with company projections.
Company Spotlight
Perform specialises in the commercialization of multi-media sports broadcasting via internet-enabled platforms. In addition to delivering and distributing actual content, the company also negotiates and provides advertising and sponsorships. Underpinning the marketing effort of the company, Perform is also engaged in technology, production, and management of subscription platforms. In one recent 3-quarter period, Perform delivered over 2.5 billion video streams to over 105 million fans. The company has contracts to cover over 200 sporting events.
