Rightster readies online video boost with Base 79, Viral Spiral acquisitions
Joseph O'Halloran 08/07/2014
Cloud-based global video distribution and monetisation network Rightster Group is set to boost its online video portfolio by acquiring Viral Spiral and Base79.
The proposed acquisitions are designed to support Rightster's ability to achieve market leadership in the online video sector. They are claimed to enable the company to combine its distribution and monetisation expertise, with Base79's leading position as the largest YouTube partner outside North America and Viral Spiral's expertise in social video management, licensing and brand engagement. Post-acquisition, Rightster expects to rank as the fourth biggest YouTube multi channel network (MCN) by audience in North America and the largest MCN outside of North America.
Rightster's directors believe that the Base79 acquisition, together with the VML acquisition, will create a scalable digital distribution solution for content creators and brand owners globally and support the company's path to profitability. In particular it is intended to provide the ability to drive sales momentum in key growth markets for Rightster, including North America, Australia and Latin America.
"Acquiring Base79 and Viral Spiral is transformational for Rightster," commented the firm's founder and CEO Charlie Muirhead explaining the rationale for the deal. "Together, they more than double the number of content partners on Rightster's 360 video distribution platform and catapult us past the one billion video views per month milestone, making Rightster the largest YouTube partner outside North America by reach and a top five partner in North America. Importantly, this greater scale and expertise improves the service we will be able to offer creators and publishers, improving our ability to both grow audiences and increase monetisation and positions us as a global leader in the exploding online video market for brands and media agencies."
The deal for Base79 will be in the region of a total consideration of up to £50 million, plus an adjustment for net cash and working capital. This will comprise £25 million plus net cash and working capital adjustment in cash on closing, plus a maximum of £25 million in new Rightster shares approximately 12 months after closing based on achievement of earn out conditions. By contrast, the acquisition of Viral Spiral will represent a total consideration of up to £4.1 million.
Once the deals are concluded, Patrick Walker, of Base79 and a former senior director of YouTube EMEA, will be joining Rightster's executive team. Additionally, Chad Hurley, former CEO and co-founder of YouTube, will be subscribing for placing shares under the placing and will be joining the Rightster advisory committee.