PERFORM Group seeks IPO

Sport Business News

PERFORM Group, a leading digital sports media company, has announced its intention to proceed with listing on the main market of the London Stock Exchange.

PERFORM is a global market leader in the commercialisation of multimedia sports content across multiple internet–enabled digital platforms and the owner of one of the largest portfolios of digital sports rights in the world, with a high growth operational and financial track record. Underlying social and technology drivers point to further substantial growth in the rapidly developing global market for commercialising digital sports content and the company directors believe the opportunities for PERFORM to monetise sports content rights are significant. Its directors believe that the proceeds of the Global Offer and the enhanced reputational benefits of being a publicly listed company will enable PERFORM to exploit more fully organic and acquisition growth opportunities and consolidate its position as a global leader for the commercialisation of digital sports content. Overview of PERFORMPERFORM owns one of the largest digital sports rights portfolios in the world, through contracts relating to more than 200 sports leagues, tournaments and events. PERFORM commercialises sports content rights across multiple internet–enabled digital platforms. In 2010, the company streamed live more than 25, 000 separate sporting events; delivered over 1. 1bn video streams; managed over 100 websites and mobile services on behalf of third parties; and in January 2011 had a reach of 95m monthly unique users. The company is run by a strong and innovative management team led by co–founders and joint chief executive officers, Oliver Slipper and Simon Denyer. The company generates revenues through four streams:•Content Distribution – provision of live sports video streams, video ports news and highlights, editorial content and sports data and statistics to licensees and business partners that include online bookmakers, global media companies, mobile operators, telecommunications companies and broadcasters•Advertising and Sponsorship – sales of online video, online display advertising and sponsorship either on (i) its video on demand (VOD) broadcast platform ePlayer (which is embedded on the websites of its global distribution partners, including leading online publishers and portals), (ii) its own–brand websites such as Goal. com, Soccerway. com and Sportal. com. au, or (iii) third–party global publisher websites such as premierleague. com, the official website of the English Premier League•Subscription – sales of monthly or annual subscriptions to a range of client–branded web–TV and mobile subscription products, including Tennistv. com and Chelsea TV Online, plus its own branded subscription products LIVESPORT. tv and Sportal Scoreboard•Technology and Production – technology and production fees for the building and management of a range of client–branded websites and mobile productsCommenting on the announcement, Oliver Slipper, joint chief executive officer, said: " PERFORM comes to the market with a track record of strong growth in revenues, profits and positive cash flows and bright prospects for the future. We have successfully followed a clear and proven strategy to build a high–growth international digital sports media business which is balanced by geographies and products. This has been built on a portfolio of world–class sports content and global platforms underpinned by leading technology. " Our experienced management team has the ability and ambition to continue to deliver on our plans. The funds raised through the IPO will give us a substantial platform to grow further. We are very excited about this next stage in our story and look forward to the opportunity the public markets will provide us with to create value for all shareholders – while delivering unforgettable experiences for millions of sports fans worldwide. " PERFORM's StrengthsThe company directors believe that PERFORM has the following key strengths which form the foundation of its success to date and its growth strategy:– PERFORM owns one of the largest portfolios of digital sports rights in the world– Live–streaming and video clip licences covering multiple sports via contracts with 200 plus leagues, tournaments and events– Digital (Milan: DIB. MI – news) sports rights under contract include international football; club football – such as Italian Serie A, Eredivisie, French Ligue 1 and MLS – ATP World Tour, WTA Tour, NBA, FIBA, MLB, NHL and PSA squash – Long–term contracts with 68% of current rights secured until 2013– Significant market opportunity driven by favourable technology trends– Rapid growth in online video and digital media consumption; free–to–view online video views expected to exceed 100bn annual views by 2014 (up from 60bn in 2010) with subscription video also expected to grow significantly– Online video advertising, sports video and sports in–play betting revenues are estimated to reach $10. 8bn in 2012 – Attractive opportunities presented by the growing penetration of next generation active connectable home devices which are expected to reach 766m units by 2014 (up from 222m in 2010) in Western Europe and North America5– A global leader in commercialising sports content across digital platforms– First–mover advantage in a fragmented and rapidly developing market– Powerful global distribution network which provides PERFORM and its partners with significant scale and global reach– Secure, robust and scalable technology platform– A high–growth, profitable business model with exceptional revenue visibility – PERFORM has recorded strong growth in revenues, EBITDA and positive cash flows since 2008– In 2010, PERFORM generated revenues of £67. 4m, up from £28. 3m in 2008, representing a CAGR of 54% and adjusted EBITDA of £10. 9m, up from £2. 2m in 2008, representing a CAGR of 123%– Long–term contracts provide exceptional revenue visibility– Entrepreneurial and innovative management team– Following the Global Offer, management will remain significant owners of the business and will be supported by an experienced Board, which has been strengthened by the appointment of Paul Walker as non–Executive chairman and Marc Brown and Peter Williams as independent non–executive directors– The company also intends to appoint additional independent non–executive directors in due coursePERFORM'S Growth StrategyAdvances in broadband technology, the mass adoption of internet–enabled devices by consumers and continued innovation in the digital sports rights and online gaming industries provide PERFORM with increasing opportunities to commercialise its portfolio of digital sports rights. PERFORM will continue to leverage its multiple platform distribution model, multiple revenue streams and global distribution capabilities and in particular focus on:– Enhancing and broadening its digital sports rights portfolio – growing the portfolio of sports content with more exclusive live video, VOD clips and highlights and at the same time further enhancing the existing portfolio, including additional multi–lingual commentary and adding more editorial content– Expanding geographically – PERFORM currently reaches approximately 95m unique users globally on a monthly basis, has offices or subsidiaries in 11 countries and continues to expand its presence in recently launched markets such as the United States, Italy, Spain, France, Germany, Singapore, India and Australia, in addition to exploring new high growth markets such as Turkey, Russia and China– Expanding delivery of content across multiple digital platforms – the rapid growth in smart phones, tablets, gaming consoles and connected televisions offer significant opportunities to capture a bigger and growing global audience– Launching new products and broadening the reach of existing products – developing products to help partners capitalise on new opportunities in the rapidly–evolving digital market – Strategic acquisitions – selective acquisitions of local champions in new geographies, businesses which bring complementary products or acquiring further direct–to–consumer platforms such as the previous acquisitions of Goal. com or Sportal. com. auSummary of the Global OfferThe Global Offer will be made to institutional investors in the UK, the EU and elsewhere. The Global Offer will have a primary and secondary component in order to achieve a minimum free float of 25%. The primary proceeds, expected to be approximately £70m, will principally be used both to accelerate PERFORM's organic growth plans and to fund complementary strategic acquisitions. The principal existing shareholders are current management and employees, who collectively own 40% of the company, and Access Industries, a privately held US–based industrial group, which holds 58% of the company indirectly through a wholly owned subsidiary, in each case on a fully–diluted basis. The company has appointed Credit Suisse and Morgan Stanley as Joint Sponsors and Joint Global Co–ordinators of the Global Offer, with Credit Suisse, Morgan Stanley and UBS acting as Joint Bookrunners.

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