Jaywing plc (AIM: JWNG), the UK agency specialising in data science, announces that it has agreed with Matt Barbelli as the sole director of Frank Digital Pty Ltd (“ Frank”) in Australia to accelerate the exercise of the Put and Call Option in relation to the 25% of the shares in Frank Digital held by Barbelli Enterprises Pty Ltd ATF Barbelli Holdings Trust (“BEP”) an entity controlled by Matt Barbelli, and which were not already owned by Jaywing. The purchase of these shares has been completed today, and Jaywing now owns 100% of the shares in Frank Digital. The acceleration of this payment has been agreed to facilitate Jaywing’s strategy, specifically the timely integration of its two Australian businesses.
As previously announced, Jaywing and Frank Digital Pty Ltd entered into an agreement on 27 February 2018, whereby Jaywing acquired 75% of the shares of Frank Digital, with the remaining 25% subject to a Put and Call Option, exercisable from February 2022. A variation agreement has now been agreed between Jaywing, BEP, Matt Barbelli and Massive Group Pty Ltd to acquire this 25% stake immediately for a consideration of AUS $1.2m (c.£0.7m), which will be paid in a series of monthly payments between now and 30 April 2022 from the surplus cash flows of the combined Australian businesses (the “Deferred Consideration”). This will bring the total consideration for the purchase of the 100% interest in Frank to AUS $3.0m (£1.7m).
This variation Agreement will enable Jaywing’s two Australian businesses (Frank and Massive Group) to achieve the benefits of a fully integrated operation. Whilst the calculation methodology has not been changed by the variation agreement, the Deferred Consideration of $1.2m remains subject to a final independent audit confirmation in November 2021 of the results of Frank Digital to 30 June 2021, and any resulting adjustments will be made against the Deferred Consideration.
Frank Digital designs and develops digital products, websites and apps for both Australian and global clients, and has grown strongly since 2018, doubling its EBITDA since then. Our two Australian businesses, Frank Digital and Massive Group (which already trades as Jaywing Australia) will now be combined as “Jaywing Australia”, under the continuing leadership of CEO Tom Geekie and CCO Matt Barbelli.
The variation agreement, which has enabled early repayment of the Deferred Consideration to the vendors of Frank Digital, is considered a related party transaction in accordance with Rule 13 of the AIM Rules for Companies. The Company’s directors consider, having consulted with the Company’s nominated adviser, that the terms of the transaction are fair and reasonable insofar as shareholders are concerned.
Andrew Fryatt, CEO, commented:
“Since joining our Group in 2018, Frank Digital has delivered strong growth in both revenue and EBITDA, through delivering award-winning design work that has won both national and global clients. Under Jaywing’s full ownership, we will now combine Frank Digital with our existing wholly-owned Australian business to offer a full-service integrated proposition in line with our UK marketing proposition. We are delighted to welcome the Frank Digital team fully into the Group. Despite the pressures of the pandemic, we are continuing to drive strong revenue growth in Australia, which will now be consistently delivered under the “Jaywing Australia” brand.”
This announcement is released by Jaywing and contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 ("MAR"), and is disclosed in accordance with the Group's obligations under Article 17 of MAR.
For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is being made on behalf of the Group by Andrew Fryatt, Chief Executive Officer.
Andrew Fryatt (CEO) Tel: 0333 370 6500
Cenkos Securities plc
Nicholas Wells / Callum Davidson (Nominated Adviser) Tel: 0207 397 8900