30
October 2024
Zinc Media Group
plc
("Zinc
Media" or the "Company")
Zinc Media Group Acquisition
of Raw Cut
Zinc Media Group plc (AIM:
ZIN), the award-winning television, brand
and audio production group, is pleased to
announce the acquisition of Raw Cut Ventures Ltd, which owns Raw
Cut Television, Raw Cut Distribution, and Tomas TV a leading
independent television production and distribution company for an
initial net consideration of £1.0m to be satisfied by the issue of
1,541,622 Zinc new ordinary shares ("Ordinary Shares") (the
"Acquisition").
Application has been made for the
1,541,622 new Ordinary Shares to be admitted to trading on
AIM. It is expected that the dealings in these new Ordinary Shares
will commence on 4 November 2024. The new Ordinary Shares will rank
pari passu with the existing Ordinary Shares.
Raw Cut, founded in 2002, is the
UK's market leader in 'Blue Light' programming, producing popular
returning series such as Road Wars and Police Interceptors. In
addition, Raw Cut is known for its critically acclaimed True Crime,
History, and Feature Documentaries for leading streamers and
broadcasters including Netflix, ITV, Channel 4 and Channel 5. It
has long standing, trusted relationships with the UK's police and
emergency services, built over decades, which are integral to its
ongoing success.
Raw Cut operates from production
bases in London and Cardiff, with its international distribution
division based in London. The acquisition expands Zinc's
geographical footprint into Wales, with Zinc now operating across
all UK regions and nations, including Scotland and Northern
Ireland. This enhanced regional presence strengthens Zinc's ability
to produce diverse, impactful stories from across the UK. The
acquisition also enhances Zinc's distribution and IP
catalogue.
In the year ended 31 December 2023,
Raw Cut delivered £4.4m revenue, had a profit before tax of £0.4m
and had net assets of £1.6m. For the year ended 31 December 2024
Raw Cut is expecting to deliver £4.6m of revenue and profit before
tax of £0.5m.
The initial consideration is £1.0
million payable in Zinc Ordinary Shares. In addition Zinc is
acquiring Raw Cut with an agreed normalised working capital, with
any additional net cash paid for in cash at completion on a
pound-for-pound basis. Up to an additional £5.5m of contingent
consideration is payable if Raw Cut achieves an EBITDA growth
target from £0.5 million at the time of Acquisition to £1.3 million
on average in FY25 and FY26 (the "Earn Out"). Payments relating to
the Earn Out will paid in either Zinc ordinary shares and/or in
non-interest bearing loan notes (to be redeemed by the relevant
noteholder no earlier than 6 months after their issue), in each
caseat the Board's discretion.
The acquisition of Raw Cut supports
Zinc's wider M&A strategy of accelerating growth and enhancing
capabilities to deliver world-class television across broadcasters,
streaming platforms, and digital channels globally.
Lock-in Agreement
Shareholders Mr Stephen Warr and Mrs
Sandra Warr have both entered into lock-in agreements with the
Company. Under the terms of the lock-in agreement, Mr Stephen Warr
has undertaken to the Company not to dispose of any interest in any
Ordinary Shares owned by him for twelve months from Admission. Mrs
Sandra Warr, who will be retiring from the business at completion,
has undertaken to the Company not to dispose of any interest in any
Ordinary Shares owned by her for six months from Admission, and
during the subsequent six month period only to dispose of any
interest with the prior written consent of the Company.
Total Voting Rights
Following Admission, the Company
will have a total of 24,345,022 Ordinary Shares in issue. The
Company does not hold any shares in treasury. Therefore, this
figure may be used by shareholders as the denominator for
calculations by which they will determine if they are required to
notify their interest in, or a change to their interest in, the
Company under the FCA's Disclosure Guidance and Transparency
Rules.
Commenting on the Acquisition, Mark Browning, CEO of Zinc
Media Group, said:
'This acquisition follows the sale
announced earlier this month of our loss making non-core publishing
business and brings in a larger, profitable and core television
business to the Group. We are thrilled to welcome Raw Cut
into the Zinc Media Group. Their expertise in producing
high-quality 'Blue Light' and documentary programming aligns
perfectly with our vision for world-class factual content. This
acquisition not only enhances our production capabilities but also
solidifies our presence across all UK regions, and enhances our IP
and distribution potential'.
For
further information, please contact:
Zinc Media Group plc
+44 (0) 20 7878 2311
Mark Browning, CEO / Will Sawyer,
CFO
www.zincmedia.com
Singer Capital Markets (Nominated Advisor and
Broker)
+44 (0) 20 7496
3000
James Moat / Sam
Butcher
MHP
Oliver Hughes / Eleni Menikou /
Ollie
Hoare
+44 (0) 7817 458804
About Zinc Media Group
Zinc Media Group plc is a premium
television and content creation group.
The award-winning and critically
acclaimed television labels comprise Brook Lapping, Red Sauce,
Supercollider, Tern Television, Rex and Atomic, along with
Bumblebee Post Production, and produce programmes across a wide
range of factual genres for UK and international
broadcasters.
The Edge Picture Company produces
film content for brands and corporates in the UK, Qatar and other
international markets.
For further information on Zinc
Media please visit www.zincmedia.com