Brave Bison Grp PLC – Possible All Share Offer for The Mission Group plc

 Possible all-share takeover to create one of the largest independent / UK-focused

digital media, marketing and technology services companies listed on AIM

Brave Bison, the digital advertising and technology services company, announces that it has made a formal approach to the Board of The Mission Group plc (“Mission”) regarding a possible offer to acquire the entire issued and to be issued share capital of Mission by way of an all-share offer (the “Possible Offer”).

The combination of Brave Bison and Mission would create a scaled media, marketing and technology services company with pro-forma FY23 revenues of approximately £120 million and pro-forma FY23 adjusted EBITDA of approximately £14 million. Potential synergies derived from duplicate costs and efficiencies have not been included in the pro-forma.

The Board of Brave Bison believes that a company of this size, scale and profitability would present a more attractive investment opportunity to institutional shareholders than either standalone company leading to the possibility of the enlarged Brave Bison trading at a higher multiple of earnings. The terms of the Possible Offer would allow Mission shareholders to participate in future value growth as shareholders of the enlarged Brave Bison. A broader investor universe may also increase liquidity for new and existing investors.

Response to Press Speculation & Possible Offer

As at 31 December 2023, Mission reported outstanding bank loans, acquisition obligations and certain overdue creditors totalling approximately £30 million, the majority of which are repayable within two years⁽¹⁾. A combination with Brave Bison, which reported net cash of £7 million as at the same date, would result in a strengthened balance sheet and improved debt and covenant ratios.

Brave Bison is currently engaging in conversations with Mission’s Board and major institutional shareholders to solicit support for the Possible Offer. Mission’s Board has yet to provide due diligence access to Brave Bison, which is one of a number of factors preventing Brave Bison from announcing a firm offer. Mission shareholders who would be interested in seeing Brave Bison announce a firm offer for Mission are encouraged to contact the Board of Mission to express their support for the Possible Offer.

The Possible Offer is non-binding and the making of a Possible Offer would be subject to the satisfaction or waiver of certain customary conditions, including completion of due diligence to the satisfaction of Brave Bison. Mission has been offered reciprocal due diligence on Brave Bison. Brave Bison reserves the right to waive in whole or in part any pre-conditions.

Under the terms of the Possible Offer, the enlarged business would be led by Oliver Green and Theo Green.

Oliver Green, Executive Chairman, commented:

“The combination of Brave Bison and Mission has the potential to deliver compelling value for both company’s shareholders, clients and employees. We look forward to engaging with the Board of Mission to discuss the merits of our proposal further.”

About Brave Bison

Brave Bison is a digital advertising and technology services company, headquartered in London with a globally distributed workforce in over nine countries. We provide services to global brand advertisers through four business units.

Brave Bison Performance is a paid and organic media practice. We plan and buy digital media on platforms like Google, Meta, TikTok, Amazon and YouTube, as well as providing search engine optimisation and digital PR services. Customers include New Balance, Curry’s and Asus. 

SocialChain is a social media advertising practice. We create content for brands and run campaigns across social media platforms like Instagram and TikTok. We use influencers to create and distribute this content, leading to high levels of engagement and brand awareness. Customers include Holland & Barrett, The Army and General Mills. 

Brave Bison Commerce is a digital commerce practice. We build complex ecommerce platforms to support digital commerce operations. We are specialist consultants in composable system architecture, the most advanced technology available for enterprise customers. Customers include Furniture Village, Fiskars and Winparts. 

Brave Bison Media Network is a portfolio of sports and entertainment channels across YouTube, Facebook, Snapchat, TikTok and Instagram. These channels generate over 1 billion monthly views, and the advertising inventory from each channel is sold through online advertising exchanges. Popular channels in our network include The Hook, PGA Tour, US Open and Link Up TV.

On 22 April 2024, Brave Bison released its audited annual results for the year ended 31 December 2023. These results showed revenue of £35.7 million (+13 per cent. year-on-year), net revenue of £20.9 million (+23 per cent. year-on-year) and adjusted EBITDA of £4.3 million (+42 per cent. year-on-year). Net cash at year end was £6.8 million (+10 per cent. year-on-year).

Brave Bison Management Track Record

Oliver Green, Theo Green and Philippa Norridge joined Brave Bison as executives in 2020, having made a strategic investment in the company in 2019. Since joining the business, the team has grown Brave Bison organically and through selective acquisitions, generating value for shareholders and creating a dynamic and exciting workplace for its employees.

Brave Bison prioritises the integration of teams and culture to drive performance for the business. The company operates a dynamic digital culture and invests in best-in-class technology to enable its employees to achieve more for clients. Brave Bison operates strategically through the marketing funnel, offering enterprise-level clients an alternative to traditional agency networks or siloed specialists, by joining the dots from trend to spend.

Since 2020, Brave Bison has made the following acquisitions, all of which have been integrated into the Brave Bison operating platform:

a)   SocialChain, a social media advertising and influencer marketing company

b)   Best Response Media, a digital commerce company specialised in Adobe Commerce

c)   Greenlight Digital, a digital advertising company

d)   Greenlight Commerce, a digital commerce company

e)   The Hook, a social publisher and social media marketing company

Shown below is the four-year financial track record of Brave Bison since the current management team joined the business:

 Strategic Rationale for the Possible Offer

1.   Value for Shareholders

In combination with Mission, the enlarged Brave Bison would generate pro-forma FY23 revenues of approximately £120 million and pro-forma FY23 adjusted EBITDA of approximately £14 million (in each case based on reported FY23 financials). Potential synergies derived from duplicate costs and efficiencies have not been included in the pro-forma.

The Board of Brave Bison believes that a combined company of this size, scale and profitability would present a more attractive investment opportunity to institutional shareholders than either standalone company leading to the possibility of the enlarged Brave Bison trading at a higher multiple of earnings. A broader investor universe may also increase liquidity for new and existing investors.

Under the terms of the Possible Offer, shareholders in Mission will become shareholders in the enlarged Brave Bison, and therefore will benefit in future value growth generated as a result of the combination.

2.   Mission Capital Structure

As at 31 December 2023, Mission reported outstanding bank loans of £20.0m, repayable on revised terms by 5 April 2026. Additionally, Mission reported acquisition obligations totalling £5.5m, with 80 per cent. payable within two years, and a £4.3m HMRC Time to Pay agreement. In aggregate, Mission’s outstanding debts and certain liabilities totalled approximately £30m at that date⁽¹⁾. Mission’s bank facility provides for maximum interest margin of 4.9 per cent., which inclusive of SONIA, currently results in a total cost of over 10 per cent. per annum.

The Board of Brave Bison believes these debt levels are unsustainable based on the historical free cashflow generated by Mission in the past three years. Even with substantial improvements to operating cashflows, the Board of Brave Bison believes Mission will struggle to repay outstanding liabilities without a combination of asset sales, which would reduce the scale and may reduce attractiveness of an investment in Mission, or an equity fundraising, which would be dilutive to non-participating shareholders. The prospect of both asset sales and an equity fundraising were mentioned in Mission’s final results announcement on 28 March 2024.

By contrast, the Board of Brave Bison believes that a combination with Brave Bison would improve debt covenants and serviceability, increase scale, not reduce it, and provide Mission shareholders with potential future value growth.

3.   Broader Service Offering

Brave Bison has a high-quality client list, exceptional staff and strong brand recognition in the UK digital media, social media and digital commerce markets. Large advertisers include New Balance, Curry’s and Holland & Barrett. Mission has an equally strong proposition with advanced specialisms in integrated media, advertising, B2B, brand communications and sports marketing.

By combining these practices as a single media, marketing and technology services company, clients would be able to procure a scaled and integrated solution across multiple channels and markets. This would allow the enlarged Brave Bison to compete for a larger share of wallet, from larger clients.

Furthermore, a combination would provide Mission clients access to Brave Bison’s sports & entertainment network, a portfolio of approximately 600 social media channels across YouTube, Facebook, Snap, TikTok and Instagram. These owned social media properties generate in excess of 1 billion average monthly views, and are followed by engaged communities across high-value demographics.

There can be no certainty any offer will be made, even if the pre-conditions are satisfied or waived, nor as to the terms of any offer

Pursuant to Rule 2.5 of the Code, Brave Bison reserves the right to vary the form and/or mix of the consideration described in this announcement and vary the transaction structure.

In accordance with Rule 2.6(a) of the Code, Brave Bison is required, by no later than 5.00pm on 9 June 2024, to announce either a firm intention to make an offer for Mission in accordance with Rule 2.7 of the Code or that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline can be extended with the consent of the Panel on Takeovers and Mergers (“Takeover Panel”) in accordance with Rule 2.6(c) of the Code.

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Notes:

(1)       As at 31 December 2023, Mission reported outstanding bank loans of £20.0m, repayable on revised terms by 5 April 2026. Additionally, Mission reported acquisition obligations totalling £5.5m, with 80 per cent. payable within two years, and a £4.3m HMRC Time to Pay agreement.

For further information please contact: 

Brave Bison Group plc                                                                         via Hannam & Partners

Oliver Green, Executive Chairman                                                          

Theo Green, Chief Growth Officer 

Philippa Norridge, Chief Financial Officer