Next Fifteen swallows up Shopper Media Group

Next Fifteen Communications announced the acquisition of data-led company Shopper Media Group on Friday, as well as its subsidiaries Capture Marketing, Lobster Agency and Threefold Agency.

The AIM-traded firm said Shopper Media Group specialises in commerce marketing activation, connecting retailers and brands with shoppers at the point of purchase both online and in-store.

Its clients included the Co-op Group, Deliveroo, the Very Group, Pladis and McCain Foods.

The business was founded in 2008 by Joel Hopwood and Matthew Lee, who were previously with Dunnhumby and who would continue in their roles following the acquisition.

Sam Knights, previously with Proctor and Gamble, would continue to run the business as chief executive officer, and Shopper Media Group would continue to operate as an independent brand within the Next Fifteen group.

The acquisition would help Next Fifteen deliver its strategy of using data to help its customers determine the optimum marketing spend, the board said.

“Next Fifteen believes that the future of marketing is tied to the growth agenda of the organisation,” said chief executive officer Tim Dyson.

“As such, we need to offer our customers a collection of products and services that will enable them to drive growth.”

Dyson said that as the retail sector evolved, it needed strategic partners with the technologies, data science and skills to drive necessary programmes.

“Shopper Media Group has developed an innovative set of predictive, data-driven tools that enable customers to optimize their spend to drive the strongest levels of growth.”

Initial consideration for the acquisition was £15.7m, of which £11.8m would be satisfied in cash, with the balance to be satisfied by the issue of 569,181 new shares in Next Fifteen.

A top-up payment was expected to be payable around February 2022, based on the EBITDA performance of Shopper Media Group for the year ending 30 September.

Further deferred consideration was then anticipated to be payable around June 2023 and June 2025, based on its EBITDA performance in the two-year periods ending 31 January 2023 and 2025, respectively.

The acquisition was expected to be earnings accretive for Next Fifteen in the current financial year.

For the year ended 30 September, Shopper Media Group reported net revenues of £8.9m, and adjusted profit before tax of £3.5m.

“With the growth of social commerce, on-demand online marketplaces and e-commerce platforms, only accelerated as a result of the impact of Covid-19, commerce activation is now becoming central to all marketing and brand planning,” said Shopper Media Group CEO Sam Knights.

“SMG has been leading the way in connected commerce marketing for the past 12 years, building data-driven tools for brands and retailers to unlock real value at the point of consideration and purchase.

“We are very excited about all the opportunities that becoming part of the Next Fifteen family will bring, not least allowing us to further develop our service for our current clients whilst expanding SMG’s successful model globally.”

At 0858 BST, shares in Next Fifteen Communications Group were up 2.47% at 746p.