LONDON (Alliance News) - Rightster Group PLC said Tuesday that it has acquired Viral Management Ltd, and plans to buy Base79 Ltd, partly funded through a placing to raise GBP42 million, in a move it expects to more than double the number of content partners of its video distribution platform.
Rightster distributes and monetises live and on-demand video content.
The company is raising GBP42 million through the placing of 75 million shares at 56 pence each, in part to fund the acquisitions. The company said that the placing price has a 0.9% discount to its closing mid-price Monday. Chad Hurley, former chief executive and co-founder of video hosting website YouTube, will be participating in the placing and joining Rightster's Advisory Committee.
Shares in Rightster were trading up 8.9% at 61.50 pence Tuesday morning.
Rightster plans to acquire Base79 for a total consideration of up to GBP50 million, consisting of GBP25 million in cash and a maximum of GBP25 million in new shares based on earn out conditions.
It acquired Viral Spiral for a total consideration of up to GBP4.1 million, with GBP1.75 million in cash, 950,120 in shares, and a maximum of GBP85 million cash and GBP85 million in shares based on earn out conditions.
The company said the acquisitions would help it achieve market leadership in online video, by utilising Base79's position as the largest partner of YouTube outside of North America. Following the acquisitions, Rightster expects to rank as the fourth biggest YouTube multi channel network by audience in North America, and the largest outside of North America.
Rightster said it had continued to see strong growth in its video traffic during the first half of 2014, seeing average video views up 48.4% compared to the second half of 2013.
The company said that its second generation of software is on track to roll out this year, which will create further efficiencies and deliver new revenue streams.