Amino has announced the acquisition of 24i Media, a provider of TV and OTT Apps, user experience and user interface (“UX/UI”) solutions and services. The group is paying total consideration of €21.4m in cash and shares for 87% of the issued share capital, although the subsequent injection of €5m and the AminoTV business into this subsidiary raises Amino’s stake to 92%. This price equates to an EV/Sales of c.4x on an historical basis. The 24i deal will provide Amino with a significantly enhanced geographic footprint and a material extension to AminoTV’s activities. The transaction will also allow Amino to accelerate its strategy of moving towards higher margin, software-led, recurring revenues in a rapidly-changing market.
Amino is paying €24.1m for 87% of the business – the consideration being €16m cash and €3.3m in Amino shares (3.2m shares) at the time of the deal, and €2.1m deferred consideration, payable 50% after one year and 50% after two years. Following the transaction, Amino has transferred €5m and AminoTV’s business into the newly-acquired subsidiary, taking its stake from 87% to 92%. The founders of 24i have an option to sell Amino the remaining 8% after two years.
The 24i business is focussed on provision of apps and programs for the provision of online video through Smart TVs, mobile phones and other streaming devices. 24i’s focus is on the “user experience” or “user interface” – the most visible part of the end-consumer offering, and one which meshes well with AminoTV’s historical strength with operators and in the “back end” of service provision.
Bringing together AminoTV and 24i will accelerate Amino’s existing strategy of focus on online video and OTT offerings, which are highly relevant to Amino’s existing customer base of operators looking to upgrade and modernise their platforms.
We upgrade 2019E sales by $4.5m and EBITDA by $1m to reflect the part-year of ownership. For 2020, we model sales increasing by some $13m and EBITDA by $3m. In this first full year of ownership, our estimates suggest that the deal will be c.6% earnings-enhancing.