QMS Sport, a subsidiary of ASX-listed outdoor advertiser QMS Media, has signed a $32.7 million agreement to buy two leading sports talent agents and marketing groups, TLA and Stride Sports Management. High-profile TLA clients range from Australian test cricketers Aaron Finch and Matthew Wade to Olympic swimmers Mack Horton and Cate Campbell.
|QMS global sports platforms|
The acquisitions represent ‘the next step’ in the development of QMS Sport as a global integrated sports platform, says QMS Media Group CEO and MD, Barclay Nettlefold.
|Barclay Nettlefold, QMS CEO and MD|
“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."
QMS Sport manages outdoor advertising for 3,000 individual global sporting events annually and aims to become a global leader of Sport in key international markets. It will invest A$32.7 million to acquire 100% of both TLA (including TLA Worldwide (Aust) and TLA - ESP Limited UK) and Stride.
The businesses 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. They offer PR, client activation, content creation, social media consultancy, graphic design, and sports consultancy.
In Australia, they will provide greater exposure to sports such as AFL, and increased client activation and fan engagement capabilities. TLA and Stride will utilise QMS Media’s print capabilities, OOH advertising, activation rights, and mobile assets to support events and client activation, while QMS Sport will refer TLA’s merchandising capabilities and events activation/consultancy to its client base to provide a more holistic service and revenue flow.
The transaction is subject to customary approvals, including financing conditions and shareholder approval of the TLA parent company, and is expected to complete within 30 days.
|QMS Sport's global footprint|
“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,” says Nettlefold. “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.
“Sport has superior advertising appeal but sports marketing remains a very fragmented market which provides the opportunity for significant consolidation benefits and synergies. New technology is also presenting unparalleled growth opportunities, and the performance to date of our existing QMS Sport business, including recently completed acquisitions, is delivering on that promise with its financial performance in the first half of CY2019 ahead of expectations.
“Industry consolidation is required to build the optimum global platform across technology, infrastructure and digital media. Scale and a global platform provide access to significant cross-sell opportunities that leverage existing relationships with large global sporting bodies, clubs, agencies, brands and rights holders, as well as significant cost synergies. QMS Sport with its existing brands including QMS Sport, TGI, StellaVista, Sportsmate, FanTribe and now TLA and Stride is very well positioned to play a leadership role.”
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.”
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 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.