deltatre Acquired by Bruin Sports Capital

Posted by Josh Stinehour
Jun 30 2016

deltatre is being acquired by investment firm Bruin Sports Capital.  deltatre provides a variety of professional services for multi-platform content delivery within the sports vertical.  Clients include the ATP, BBC, BT Sport, English Premier League, FIFA, and UEFA.  deltatre is headquartered in Turin, Italy with offices throughout Europe.

deltatre had been a subsidiary of Italian parent Mediacontech, who owned all Class A shares, equating to 51% of the share capital of deltatre.  Mediacontech also had a minority interest in LMGR, the business controlling the remaining 49% of deltatre.

As part of an agreement with creditors in late 2013, Mediacontech had pledged to divest deltatre no later than December 31, 2016.  The divestiture process was initiated in the third quarter of 2015 and run by HSBC, who acted as the exclusive financial advisor.

The 2015 annual filing of Mediacontech provides some interesting background on the sale process.  110 potential buyers, both strategic and private equity, reviewed the opportunity to purchase deltatre.  In connection with the sale process, Mediacontech executed 40 non-disclosure agreements to allow for more detailed sharing of information on deltatre.

Based on a press release from Mediacontech the purchase price of the transaction was €122.1 million, with €62.2 million due in cash at closing.  The closing is expected to occur by the end of October 2016.  It is unclear in the press release whether the purchase price equates to an enterprise value.  Sportcal is reporting an estimate of enterprise value of €145 million.  Since the co-founders of deltatre, Giampiero Rinaudo and Luca Marini, are maintaining a significant minority interest (through their ownership position in LMGR), the purchase price likely represents an acquisition of less than 100% of the equity capital.

For the 2015 calendar year, deltatre had revenue of €57.4 million and EBITDA of €8.3 million.  Using the enterprise value figure of €145 million and 2015 financial results, the valuation of deltatre was 2.5x Revenue and 17.5x EBITDA.  Given 2016 is an even year with several significant events in Europe such as the European Football Championship, it is likely 2016 results will outperform 2015.  The sensitivity to the even and odd sporting calendar in Europe is apparent in deltatre’s historical revenue pattern. 2012 revenue was €45.3 million (London Olympics), 2013 revenue was €34.0 million, and then 2014 revenue was €56.5 million (Sochi Olympics).

In the annual filing discussing 2015 results, Mediacontech attributed the strong 2015 results of deltatre to a combination of early initiatives for the 2016 European Football Championship and the Rio Olympics; the successful geographic expansion France, Germany, and Switzerland; and the first European Olympic Games in Baku 2015.

Bruin Capital Sports was launched in January 2015 by sports business executive George Pyne.  Investors in Bruin Capital Sports’ fund include the advertising firm WPP.  Commenting on the deltatre acquisition, Mr. Pyne said “At Bruin Sports Capital we understand the importance of media and technology as tools for global engagement in sport, and believe with our experience and access to long-term flexible capital we can help deltatre continue to innovate and grow their business.”

Giampiero Rinaudo will remain the CEO of deltatre.  “Celebrating our 30th anniversary we believed there was still a lot of potential in deltatre, but we understood that the next level of growth needed a new partner that could really support us in our plans and long-term strategy” Mr. Rinaudo said.



Related Content: 

deltatre Press Release



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