Digitalbox PLC (AIM:DBOX), a mobile-first digital media company that owns popular platforms like Entertainment Daily and The Daily Mash, has agreed to buy the digital assets of 99 Problems, Student Problems, and The Life Network Shopping from Media Chain Group Limited for US$800,000.
This acquisition will substantially expand Digitalbox's audience reach, as the combined follower base from the purchased assets will more than double the company's current 8mln Facebook followers.
It includes acquiring 10mln Facebook followers from 99 Problems, 1.4mln TikTok followers from Student Problems, and 1mln Facebook followers from The Life Shopping Network.
Satisfactory testing by Digitalbox must be completed before finalising the purchase, with payment made through an immediate deposit of US$79,000 and a further US$720,000 upon completion, expected within two to five months from the exchange date.
Digitalbox plans to fund this acquisition from its existing cash resources, which were approximately £2.4mln as of 28 July 2023. The deal is expected to be immediately earnings enhancing.
"The opportunity to acquire some of the Media Chain Group assets is an excellent way for us to explore significantly extending the audiences currently being served by the Digitalbox brands," said James Carter, chief executive of Digitalbox.
"With 99 Problems having started life as a social page called Student Problems, we believe there are plenty of synergies to build around The Tab whilst there is very strong common ground between Entertainment Daily's audience and those who follow The Life Shopping Network.
"The management team will get to work straight away on proving this case before completion."