QMS to acquire sports media company TGI
Out-of-home media company QMS has announced its intentions to acquire sports media companies TGI Systems Corporation (TGI) and TGI Europe GmbH (TGIE) as it looks to expand its sports technology and media rights business, QMS Sport.
The announcement comes as QMS prepares to release its financial results to market, and in the wake of unprecedented movement in the outdoor media space.
TGI offers LED signage at international sporting events
Australia’s two largest outdoor media companies have been shaken up in recent months, with Ooh Media set to acquire Here, There & Everywhere’s (HT&E) street furniture business Adshel, while second-largest player APN Outdoor will be snapped up by international giant JC Decaux.
Both deals secured regulatory approval from the ACCC last week.
QMS said it expects its transactions to be completed by the end of the year.
The agreement in principle will see QMS Media acquire a majority interest (90%) of TGI and TGIE for approximately $40m. “Another strategic shareholder” will hold 5% of the entities, while key existing management will retain the final 5%.
TGI and TGIE provide digital technology solutions (LED signage, software management platforms and fan engagement tools) across USA, Europe and South America for international sporting events, organisations and companies. They operate across sports including soccer, cricket, rugby, American football and hockey.
On a 12-month pro-forma basis, the acquisitions are expected to contribute earnings before interest, tax, depreciation and amortisation (EBITDA) of between $7m and $8m before minorities for the 2019 financial year.
QMS said the acquisitions complement the exisiting QMS Sport portfolio across Australia and New Zealand, and provide additional scale and growth opportunities.
“This will further strengthen QMS’ position in key strategic international sports markets as it continues to expand its geographic footprint, and simultaneously diversify revenue channels,” a statement said.
QMS’ managing director and group CEO, Barclay Nettlefold, said the acquisitions marked an important new era for the business.
“As part of our growth strategy, these investments mark an important new era for our sports business, as it continues to build on its market-leading reputation. With our combined sports technology and digital media assets, QMS Sport is set to become a formidable provider of digital technology globally,” he said.
“This combination brings together major international sporting clubs and codes under one unified and powerful technology and digital platform. We have identified that the international sports environment provides QMS with an avenue to deliver further value to our shareholders and I am genuinely excited by the growth opportunities these investments present.”
TGI president Patrick Vendrely said his business had a significant strategic focus on further expanding and developing its sports technology business.
“We believe that QMS is the right partner to help deliver on our strategic growth agenda and establish an international powerhouse in sport technology and digital media across all major sporting codes globally.”
The transaction is subject to approval from QMS’ lender and relies on the finalisation of interrelated transactions. In Germany, the transaction also requires notarisation in order to be effective.
QMS releases its financial results to the market on Friday 31 August.
