CentralNic acquiring portfolio of websites for $5.2m

19th Dec 2022 08:32

(Sharecast News) - Online presence and marketing specialist CentralNic has agreed to acquire a portfolio of revenue-generating niche websites for $5.2m in cash and assumed working capital liabilities, it announced on Monday, in an asset deal from multiple sellers.

The AIM-traded firm said the acquisition was expected to complete immediately, and would be financed from its available liquidity.

It said the acquisition would be immediately earnings accretive, explaining that on a standalone basis, the websites were expected to generate at least $1.9m in annualised revenue and $1.4m in annualised EBITDA post-acquisition.

As CentralNic was already monetising a part of the websites' traffic, that was expected to translate into about $1.2m of additional revenue, $0.5m of reduced cost of goods sold and $1.4m of EBITDA as of financial year 2023.

The acquisition was part of CentralNic's vertical integration strategy, providing the group's online marketing segment with proprietary, exclusive special interest traffic to monetise.

As the company said in its announcement on 12 December, it was intended that in the future, the emphasis of cash flow generated would be a "more balanced approach" of returns to shareholders, deleverage and complementary bolt-on acquisitions.

"Exclusive access to proprietary website traffic is a pillar of our online marketing segment's sustainable competitive advantage," said chief executive officer Michael Riedl.

"This acquisition will give us more exclusive direct navigation traffic, augment margins for our fast-growing online marketing business and generate attractive cash flow returns."

At 1211 GMT, shares in CentralNic Group were up 6.25% at 144.5p.

Reporting by Josh White for Sharecast.com.