Chime Communications PLC Acquires SJX Partners, LLC
Chime, the international communications and sports marketing group, announces the acquisition of the business and assets (the "SJX Business") of SJX Partners, LLC (the "Seller"), a sports and entertainment marketing business based in Connecticut, United States. Chime is acquiring the SJX Business from the Seller.
The SJX Business represents a range of key sports and entertainment businesses including US Tennis Association, Cirque du Soleil and Little League Baseball, earning annual retainers and commission on sponsorship sales.
The acquisition is expected to be immediately earnings enhancing and significantly expands CSM Sport and Entertainment's business in the United States.
For the year to 31 December 2013, the SJX Business had revenue of US$4.4 million (£2.8 million) and profit before tax of US$1.9 million (£1.2 million). As at 31 July 2014, the SJX Business had gross assets of US$0.8 million (£0.5 million).
Initial consideration for the acquisition is US$8.5milllion (£5.3 million). Of this sum 70% will be paid in cash with the remaining 30% being satisfied through the issue of 593,647 new Chime ordinary shares.
Further earn-out consideration may become payable over the period to 2020 depending on the profitability of the SJX Business. Such earn-out consideration is capped at US$19.5million. 70% of any earn-out consideration will be payable in cash, and 30% will be payable in shares or cash at the Company's election.
Managing Partners Jeffrey Jonas and Harlan Stone, whom Chime considers to be key individuals to the SJX Business, have entered into executive service contracts with Chime and will remain involved at a senior management level.
Application will be made for the 593,647 new ordinary shares being issued as part of the initial consideration for the SJX Business to be listed on the Official List of the Financial Conduct Authority and to be admitted to trading by the London Stock Exchange on its main market for listed securities. It is expected that dealings in the new ordinary shares will commence on 30 October 2014. The new ordinary shares will rank pari passu with Chime's existing issued shares.
The issued share capital of Chime is currently 99,300,198 ordinary shares, each with voting rights. Therefore following admission of the new ordinary shares the issued share capital of Chime on 30 October 2014 will be 99,893,845 ordinary shares each with voting rights.
New banking facilities
Chime also announces an increase and extension of its current £95 million facility which is due to expire in September 2016.
Chime will now benefit from facilities of £130 million split between RBS and HSBC with reduced margin, increased operational and financial flexibility, and an extended maturity date of September 2019. In addition the facility gives Chime access to potential incremental liquidity of £25 million, should this be required.
Commenting, Christopher Satterthwaite, Chief Executive of Chime, said:
"We are delighted with the SJX acquisition which is in line with our stated strategy and expands our presence in the United States, the largest sports marketing marketplace in the world."