A UK-based sports marketing agency has acquired a stadium perimeter advertising business in a bid to diversify its revenue streams. The AIM-listed company has also announced a conditional placing.

A UK-based sports marketing agency has acquired a stadium perimeter advertising business in a bid to diversify its revenue streams. The AIM-listed company has also announced a conditional placing.

Essentially Group’s (Essentially) acquisition of Sportseen completed for up to £9 million and is expected to be earnings enhancing within its first year of trading. The consideration comprises £6.3 million in cash and the issue of 2.7 million new shares, expected to commence trading on 6 May.

Essentially has also conditionally raised £6 million by way of a placing to existing and new institutional shareholders. The placing, managed by Cenkos Securities plc, will generate net proceeds of £6 million for the repayment of debt drawn down under Essentially’s existing facilities to fund the Sportseen purchase, the remainder of which will constitute working capital.

Sportseen sells advertising space on traditional fixed, scrolling and LED perimeter boards for all the UK international rugby matches, as well as four international football associations and seven Premier League football clubs. The business has exclusive contracts or relationships with the Rugby Football Union (Twickenham), the Scottish Rugby Union (Murrayfield) and the Welsh Rugby Union (Millennium Stadium). As such, it is expected to strengthen the offering of Essentially’s existing subsidiary, Frontiers – a perimeter advertising company focused on cricket.

Essentially plans to grow its presence in both the UK’s cricket and rugby perimeter advertising markets, necessitated by the dip in the group’s profit cycle associated with the Six Nations rugby tournament.