LONDON - XLMedia PLC (AIM: XLM), a leading provider of digital sports media services, has entered into a conditional agreement to sell its North American business to Sportradar AG for up to $30 million in cash. The transaction includes an upfront payment of $20 million and a potential additional $10 million based on performance, payable in April 2025.
The sale is subject to shareholder approval at a General Meeting scheduled for November 7, 2024, with completion expected shortly thereafter. Sportradar has already secured voting support from stakeholders holding approximately 31.18% of XLMedia's ordinary share capital.
Upon completion of the sale, XLMedia will transition into an AIM Rule 15 Cash Shell (LON:SHEL), focusing on the distribution of proceeds from this disposal and the previously announced sale of its European and Canadian assets. The North America business reported a revenue of $27.5 million and an estimated adjusted EBITDA of $5.5 million for the year ended December 31, 2023. The total valuation of the North American disposal reflects a multiple of 5.5 times its 2023 adjusted EBITDA.
Including both the North American and European disposals, XLMedia anticipates generating up to $72.5 million in cash before costs and liabilities. This strategic move follows the company's assessment that the individual value of its businesses was not fully recognized in its share price.
The decision to sell comes after the company's efforts to integrate three acquired entities into its North America business and develop strong partnerships within the U.S. market. Despite these efforts, the company's U.S. revenue growth fell short of initial expectations. The Board believes that the sale to Sportradar represents a fair valuation for the standalone business's future revenue and profitability.
Chairman Marcus Rich stated that the agreement to sell the North America Business to Sportradar aligns with the Board's commitment to maximizing shareholder value, especially following the Europe disposal. The company anticipates an initial distribution from the net proceeds to shareholders before the end of the year.
The details of the North America disposal and the upcoming General Meeting will be provided in a circular to shareholders and will also be available on the company's website. This news article is based on a press release statement.
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