Essentially buys two sports consultancies

A sports marketing and media group has moved its business into the cricket sector after buying two consultancies.

A sports marketing and media group has moved its business into the cricket sector after buying two consultancies.

A sports marketing and media group has moved its business into the cricket sector after buying two consultancies.

Essentially Group, a sports representation, sponsorship, rights exploitation and consultancy, has bought Athletes1 Sports and Frontiers Group UK.

These acquisitions are part of a strategy designed to expand the business through organic and acquisitive growth.

Frontiers is a sports marketing business specialising in cricket, while Athletes 1 is a cricket/athlete management agency with offices in Australia and India.

An initial £8.2 million payment was made on completion with a deferred sum of up to £4.1 million due if earn-out targets are achieved.

The deal was financed by a £5.4 million AIM placing and through securing new debt worth £2.92 million with Allied Irish Bank. The consideration of the deal also includes shares.

Essentially’s chairman, John Byfield, said there is a strong rationale to complete these acquisitions. “They represent a good cultural fit for our existing business and will also, we believe, be earnings enhancing for the year ended December 31, 2007 and beyond.

“As with our existing business both acquisitions have high levels of recurring revenue under long term contracts,” he added. “These contracts are with a mixture of athletes, brands and stadiums all connected with cricket, expanding Essentially’s core offering into a third sport.

“There is the scope for future organic growth, as both Frontiers and Athletes 1 are currently growing and are forecast to continue to do so. The enlarged group should benefit further from obvious operational synergies and cross-selling opportunities.”

Essentially’s Jersey legal adviser was Carey Olsen, led by Guy Coltman, who said: “Having advised Essentially on its admission to AIM and on a number of matters since then, it was good to participate in another transaction which grows Essentially’s business, both in terms of its depth and breadth.”

Essentially’s UK legal adviser was Couchman Harrington Associates, led by partner. Satish Khandke and solicitor Sam Hollis.

Khandke acted for Global Sports Management when it was bought by Essentially in May 2006.

The group was advised on the funding of the deal by law firm Bircham Dyson Bell, led by partner David Goodman, solicitor Amy Ely and Keith Bottomley.

Frontiers is an international sports and marketing business that generates income from four sources: cricket sponsorship, other sport sponsorship, corporate consulting and event management. Cricket sponsorship sales predominantly relate to contracts to sell in ground advertising/sponsorship for the perimeter boards of all English Test match grounds.

In the year to July 2006, Frontiers had an audited turnover of £4 million and audited profit before tax of £400,000.

Athletes 1 operates an international sports management business focusing on athlete representation, sponsorship and cricket rights management. Its clients include Anil Kumble, Ricky Ponting, Liam Plunkett, Jon Lewis, Mark Butcher and Graham Thorpe.

The company had a profit before tax of £200,000 from an unaudited turnover of £1.2 million in the year to October 2006.

Marc Barber

Marc Barber

Marc was editor of GrowthBusiness from 2006 to 2010. He specialised in writing about entrepreneurs, private equity and venture capital, mid-market M&A, small caps and high-growth businesses.

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