Australian mobile marketing and payments m-commerce company Mobile Embrace (MBE) has expanded its performance marketing offering and international footprint with the acquisition of Marketing Punch, a UK pioneer in performance marketing.
Founded in 2004, Marketing Punch operates in the UK, France and Australia and is an industry pioneer in providing qualified online performance marketing support to a large range of clients.
Marketing Punch’s recurring revenue base and client retention rates are particularly strong with more than 60 per cent of clients placing an order with the business every month for the past six years.
The business has a proprietary opted-in database of over 5 million consumers (growing at 220,000 new consumers per month) and delivers over 100,000 qualified leads to clients each month.
Wow, talk about knocking it out of the park.
What are the terms of this acquisition?
Marketing Punch’s team, led by the founder and MD Charles Haynes, will continue with the business while Charles has agreed to enter into an employment contract with MBE.
Now the numbers…
MBE has acquired Marketing Punch for an upfront cash consideration of £2.14 million as well as the issue of 4 million MBE shares at 26 cents escrowed for a period of 12 months.
In addition to the upfront consideration, and subject to achieving 100 per cent of financial targets over the next three years, there will be an additional cash consideration of £1.5 million for each year of successful achievement (£4.5 million).
Now Marketing Punch is forecast for the UK FY2016 to generate annual EBITDA of £1.2 million from revenue of £3.7 million, which means the acquisition of the business will be immediately earnings per share accretive to MBE. Sweet deal, huh?
How is this acquisition being funded?
MBE has secured a £4 million debt facility with the Commonwealth Bank of Australia.
It will immediately use £2 million of that to partly fund this acquisition and the rest will be used to fast-track the organic growth of the company’s m-payments offering internationally.
MBE is particularly pleased and encouraged by this support it has received from the CBA and the confidence a bank of its calibre has displayed in its business model and growth prospects.
This is yet another strategic MBE acquisition
This acquisition is in line with MBE’s strategy to acquire quality growth businesses that will accelerate its market expansion and performance marketing capabilities.
Marketing Punch complements MBE’s existing performance marketing businesses (Vizmond Media, The Performance Factory, 4th Screen Advertising and eggMobi) and gives it the necessary scale and international reach to deliver a more integrated offering to clients and partners both domestically and internationally.
With consumers increasingly transacting across multiple online and mobile platforms and devices, MBE will be able to provide a much broader suite of performance marketing and consumer analytics products.
Commenting on the acquisition, Mobile Embrace CEO, Chris Thorpe (pictured above), said, “By being part of a more multi-faceted performance marketing offering, there are immediate organic revenue growth opportunities that will be realised by leveraging Marketing Punch’s product offering across the MBE group. We have every confidence in this business and its growth potential as part of MBE.”
What is the story behind Marketing Punch?
Anthill caught up with Charles to tell us more about the company he founded – how and why he built it as well as what exactly it does. Below is what he had to share with us.
What inspired you to start Marketing Punch?
Prior to setting up Marketing Punch in 2002, I worked in a niche market of the building sector with my company called Group Architectural Ironmongery.
I started that in 1998 and grew it pretty quickly. Along the way, I designed an award-winning range of door handles before selling out to Cooper Holdings in 2002.
It was after selling the company that I decided to look at the world of the internet. The “dot.com bubble” had burst, and things had smoothed out again. The internet was seemed more viable than ever as part of the marketing toolbox for businesses selling goods and services.
I decided that the first step was for me to become a Certified Microsoft Professional and an A+ Certified Technician. This allowed me to get the skills for setting up a website and generate revenue from it. Within three months, a technical manager had been hired and financed internally, as the company was already generating sufficient cash flows.
The inspiration to start Marketing Punch was my realisation that if I got a direct consent from any email-using consumer relating to any specific product, then I could build a business that would serve the needs of that consumer while also satisfying a need of product-based businesses.
If I could help a business generate valuable email leads to actual consumers who were really interested in his products, we would both win.
I thought that a performance-based business around lead generation was always going to work. Businesses always need new people, massive numbers of people, to talk too and sell too.
What gap in the market did you set out to fill with Marketing Punch?
In those fairly early days of internet business and online selling not many companies were good at it back then, and marketing on the web had not yet got into the mainstream of business thinking really. Even today, not many marketing departments want to deal with it from scratch, so they hire it out.
Very simply, Marketing Punch got permission to contact consumers who had shown a direct interest in a particular product. Businesses were prepared to pay us for those lists of “warm prospects”. We ensured that interest was real expressed interest in a specific product, as opposed to data modelling.
What exactly does Marketing Punch do?
We help our clients penetrate new consumer markets and increase their new customer acquisition. We deliver high returns on our clients’ marketing investments.
Simply stated, we generate high quality opt-in consumer leads so that our clients may market to them via email. We help our clients talk to more consumers than they could find otherwise, consumers who are truly interested in their product.
Our job at Marketing Punch is to create ways to connect with consumers that our client has not yet found. We use those connections to find out whether that consumer (or a specific demographic of consumers) is interested in more information about a specific product or product range that our client has for sale.
Once we have created a list of consumers that have interest, we get their permission to tell them more about the product. Actually, it is at this point that our client steps in and uses his own messaging approaches to connect with the warm prospect and sell his goods and services.
At that point, Marketing Punch has stepped out of the picture. We don’t do the product selling; that is our client’s job. We focus on getting lists of interested, potential customers for him.
We have grown and prospered because our approach to creating real leads helps our clients grow and prosper. We now operate several websites for lead generation for the French, UK and Australian markets. Our sites generate well over 10,000 registrations a day – with a monthly average of about 75,000 new registrations.