CentralNic Group plc (AIM: CNIC) announced today that it has entered into an agreement to acquire a portfolio of revenue generating niche websites (“Publishing Network”) for a consideration of USD 5.2m in cash and assumed working capital liabilities (“Acquisition”) in an asset deal from multiple sellers. The Acquisition is expected to complete immediately and will be financed from available liquidity.
The acquisition will be immediately earnings accretive. On a standalone basis, the websites are expected to generate at least USD 1.9m in annualised revenue and USD 1.4m in annualised EBITDA post-acquisition. As CentralNic is already today monetising a part of the websites’ traffic, this is expected to translate into c.USD 1.2m of additional revenue, c.USD 0.5m of reduced COGS and c.USD 1.4m of EBITDA as of financial year 2023. The Acquisition is part of a vertical integration strategy, providing the Group’s Online Marketing segment with proprietary, exclusive special interest traffic to monetise.
As the company articulated in its RNS on 12 December 2022, it is intended that in the future, the emphasis of cashflow generated will be a more balanced approach of returns to shareholders, deleverage and complementary bolt-on acquisitions.
Michael Riedl, CEO of CentralNic, said “Exclusive access to proprietary website traffic is a pillar of our Online Marketing segment’s sustainable competitive advantage. This acquisition will give us more exclusive direct navigation traffic, augment margins for our fast-growing Online Marketing business and generate attractive cashflow returns.”