CIP Merchant Capital puts another £1.25m into Brave Bison

CIP Merchant Capital announced on Monday that it has conditionally agreed to invest a further £1.25m in Brave Bison, by participating in that company’s proposed placing to raise £6.2m at a price of 1.35p per share.

The AIM-traded investment firm described Brave Bison as a “social media and marketing” group, which was seeking to acquire the entirety of Greenlight Digital and Greenlight Commerce for a total of £6.84m in cash and shares.

It said the proposed further investment was conditional on shareholder approval at a general meeting of Brave Bison on 31 August, and admission of the 455,555,560 shares to be issued under the placing to trading on AIM, which was expected on 1 September.

On completion of the placing, CIP would acquire a further 92.5 million Brave Bison shares for consideration of £1.25m, to give it a total shareholding of 164.35 million shares, representing around 15.3% of Brave Bison's enlarged issued share capital.

“CIP sees in the Acquisition a strong rationale given the transformational nature of the acquisition that is expected to be significantly earnings-accretive for Brave Bison in the current year and beyond,” the CIP board said in its statement.

It noted that in the 2020 financial year, Greenlight generated revenue of £14.3m and adjusted EBITDA of £0.8m, approximately doubling the Brave Bison group's revenues on a pro-forma basis.

“The acquisition represents a strategic leap for Brave Bison through the acquisition of in-demand and high-growth digital-first capabilities, such as paid and organic media and e-commerce technology.

“The combination with Greenlight brings new talent, new services and new opportunities to the Brave Bison group, including further expansion into the Asia-Pacific region using Brave Bison's existing operations in Singapore as a beachhead.”

Brave Bison, in the year ended 31 December, achieved revenue of about £14.5m, a gross profit of around £4m, and a loss before tax of £2.3m.

As at 30 June, Brave Bison had cash and cash equivalents of £3m, and net assets of £0.9m.

At 1427 BST, shares in CIP Merchant Capital were up 2.59% at 57.45p, while those in Brave Bison Group were down 5.26% at 1.8p.