Future buys US-based Mobile Nations for up to $120m

1st Mar 2019 13:10

(Sharecast News) - Specialist media platform Future has announced the acquisition of US-based digital publisher Mobile Nations for up to $120m in a deal that is expected to be earnings-enhancing in the current financial year and "materially" enhancing in the first full year after completion.There is an initial cash consideration of $55m - which will be funded via the group's existing debt facilities - with a further $5m to be satisfied through the issue of 615,166 new ordinary shares. In addition, a further variable deferred consideration of up to $60m will be paid, subject to meeting financial targets based on the year ending 31 March 2020.Mobile Nations is a global independent digital publisher focused on consumer electronics, combining content, community and commerce to deliver shopping enablement solutions, with its key brands including Android Central, iMore, Windows Central and Thrifter. The company's brands educate and inspire a monthly audience of over 40m technology enthusiasts and support consumers in making better-informed buying decisions for personal electronics.Future said the business was a "clear strategic fit" and that the deal supports its strategy of seeking leadership in niche specialist markets. It said Mobile Nations' complementary brands will further diversify and strengthen its presence in the US.In the year to the end of December 2018, Mobile Nations generated revenue of $16.4m and earnings before interest, tax, depreciation and amortisation of $8.2m.Future's chief executive, Zillah Byng-Thorne, said: "This acquisition will further strengthen our market leading position in technology and extend our growing presence in the US. Mobile Nations' consumer electronics brands, which combine content, community and commerce to deliver shopping enablement solutions, are highly complementary to our existing portfolio."We already have an established commercial relationship with Mobile Nations through its longstanding partnership with Purch, which we acquired in September 2018. The addition of Mobile Nations' brands will deepen our presence and expand our opportunities to monetise our significant US online audience." At 1310 GMT, the shares were up 10.2% at 756p.Numis said this looks "a great deal" for the group, with very strong strategic fit and further enhancing Future's digital and global geographic presence."The transaction comes on the back of a strong trading update last week and capital markets day two weeks ago, that more than anything hammered home the significant and truly global opportunity that exists for the group," Numis said.The broker lifted its price target on the buy-rated stock to 860p from 785p and said it remains a key pick for 2019.Fiona Orford-Williams, analyst at Edison Investment Research, said: "The vertical of consumer electronics is home turf and there are some good, recognised brands here. This is a business that already reaches 40m monthly average users, so the scope for upgrading may be less than for some earlier transactions. Nevertheless, the key for Future to close the revenue per user gap between the US and the UK business is scale and this acquisition moves them further along the road."