Better Collective to acquire Playmaker Capital in €176m deal
Playmaker Capital operates a strong portfolio of sports media brands across the Americas.
The transaction is expected to close before the end of Q1 2024.
Once completed, Better Collective anticipates it will become Latam market leader, while also strengthening its position the US.
Playmaker’s leadership team have agreed to stay on to help drive the business forward.
Shares in Better Collective were trading more than 7% higher on the news.
Better Collective co-founder and CEO Jesper Søgaard (pictured) described the acquisition as “transformational” for Better Collective.
“Upon closing of the acquisition, we will significantly grow our audience and reach a larger segment of generalist sports fans,” Søgaard said.
“For years, Playmaker Capital has built incredibly strong sports media brands and excited sports fans across the Americas with high-quality sports content, cultivating a loyal and dedicated following.
“The skilled team behind Playmaker Capital brings a unique set of media competencies that will boost our organisation. Saying that I am excited to welcome the new team to the Better Collective group would be an understatement,” he added.
Playmaker Capital at a glance
Headquartered in Toronto, Playmaker Capital’s shares are listed on both the TSX Venture Exchange in Canada and the OTCQX in the US.
Playmaker Capital owns and operates prominent sports media brands such as Futbol Sites, Yardbarker and The Nation Network.
The company also operates Wedge, a paid media division with a core focus on the US market, which will be integrated into Better Collective’s paid media division.
Playmaker’s combined portfolio of digital sports media brands attracts a monthly average of more than 200 million visits.
It also has a social media following of more than 180 million across Facebook, Instagram, YouTube, TikTok and X (formerly Twitter).
As at Q3 2023, Playmaker Capital has trailing 12-month revenue of €55m and EBITDA of €15m.
That implies an EV/EBITDA multiple of 11.7x, which Better Collective expects to bring down to below 5x by 2026e.
Prior to the transaction, Better Collective had formed several media partnerships with some of Playmaker Capital’s premier sports media brands.
Consequently, Better Collective said it has already established an extensive understanding of and insight into the quality of Playmaker’s brands.
Playmaker Capital co-founder and CEO Jordan Gnat commented: “Over the past 12 months I have been talking a lot about a transformational deal for Playmaker and its shareholders that will take this company to the next level.
“Today’s announcement does exactly that, and I could not be more excited for the Playmaker family to join the Better Collective family. Their success is undeniable and their vision to become the leading digital sports media group aligns with us exactly.“The cultures of our companies are very similar, and I see the integration and synergies to be incredibly accretive to shareholders.”
Better Collective and Playmaker Capital said they both stand to benefit from the increased scale of the combined business as well as higher levels of product, technology, and marketing investments.
Better Collective also has the opportunity to extend its reach among generalist sports fans in the Americas and strengthen its position in South America.
The acquisition also presents the chance to enhance Better Collective’s portfolio through the implementation of performance-based marketing approaches across the acquired sports media.
Furthermore, the companies expect significant operational synergies, leading to more efficient processes and improved monetisation prospects for both entities.
As part of this transaction, shareholders of Playmaker Capital will receive a total consideration of C$0.70 per share. This consideration is a combination of cash and shares from Better Collective.
Playmaker Capital’s shareholders will have the option to choose between receiving C$0.70 in cash or 0.0206 shares of Better Collective for each Playmaker Capital common share.
However, this choice is subject to proration and is limited to 65% shares in Better Collective and 35% in cash.
Playmaker Capital shareholders who do not elect cash or shares of Better Collective will receive a default consideration of C$0.245 in cash (35%) and 0.0134 shares of Better Collective (65%) per Playmaker Capital common share.
Share issuance and dilution
The total aggregate share consideration will involve up to 3,100,880 shares of Better Collective.
This will be settled partially by transferring 1,387,580 treasury shares and up to 1,713,300 newly issued shares.
The number of newly issued shares will be determined based on the volume-weighted average price of Better Collective shares over the ten-day trading period just before the signing of the definitive agreement.
This average price amounts to SEK270.48 per share, which is equivalent to C$33.94 per share.
With the issuance of new Better Collective shares, the total outstanding number of Better Collective shares will be up to 56,937,147. This issuance will result in a dilution of existing Better Collective shareholders by 3.1%.
The cash portion of the consideration will be funded using existing cash from the balance sheet and established bank credit facilities.
The two largest shareholders of Playmaker Capital – Relay Ventures and JPG Investments, a holding company owned by Playmaker Capital CEO Jordan Gnat – together hold 24% of all outstanding Playmaker Capital common shares.
JPG Investments will convert a portion of its Playmaker Capital common shares into Better Collective shares, with an expected consideration split of roughly 75% in Better Collective shares and 25% in cash.
Both shareholders have signed lock-up agreements that prevent them from selling their Better Collective shares for a specified period.
The closing of the transaction is subject to approval from Playmaker Capital shareholders, court approval, regulatory clearances, and other customary closing conditions for transactions of this nature.
However, the directors, officers, and certain shareholders of Playmaker Capital, collectively representing 49.8% of Playmaker Capital’s outstanding common shares, have already agreed to support and vote in favour of the transaction.
Upon completion of the transaction, Better Collective plans to reassess its long-term financial targets for the period spanning 2023 to 2027.