Brave Bison raises £4.75m and acquires Social Chain

 ( ), the social and digital media company, said it will acquire 100% of Social Chain Limited for an initial consideration of £7.7m.

Social Chain is a social media and influencer marketing agency founded in 2014. The company works with global brands such as Amazon, TikTok, KFC, and Apple Beats to create social media advertising campaigns and perform influencer marketing services.

The initial consideration will be partially funded via a placing to raise £4.75m at 2.3p/share, representing a 3.4% discount to 's volume-weighted average price for the 60 days ended 2 February. The placing shares will represent c. 16% of Brave Bison's enlarged share capital on admission.

Separately, Brave Bison said it expects to "meet or exceed" current market expectations for the financial year ended 31 December 2022. The company expects revenue to rise 30% or higher year-on-year, and net cash to be £6.2m at year end.

Oliver Green, Chairman of Brave Bison, commented: "We've long admired Social Chain, which we believe is among the world's best regarded social media and influencer marketing brands, and we're excited by the highly relevant clients it brings into our business. Social Chain has huge potential for growth within Brave Bison, taking the momentum Pete and the team have built up using Steven Bartlett's platform. We're delighted to be taking this big step forward as we continue to build a media, marketing and technology company for the new era."

View from Vox

This is major M&A news from Brave Bison that is expected to add significant value to the company via exposure to US markets. Social Chain's offerings and client base are highly complimentary and relevant to Brave Bison's business. On a pro-forma basis, the acquisition is expected to increase Brave Bison's revenues from social media advertising 7-fold to £15m, with total revenues for the enlarged company forecast at £40m for the FY ended 31 December 2023. The acquisiton is expected to be earnings accretive in the current FY.

Specifically, Social Chain is expected to generate revenues of £13.8m and an adjusted EBITDA loss of £100k. Over the past five years, Social Chain has grown at a CAGR of 14%, approximately doubling revenues from £7.1m recorded in FY17.

The acquisition will grant Brave Bison access to major US and global customers, including Amazon, TikTok, Arla, KFC, and Apple Beats. Still, on a combined basis for the enlarged company, no single customer will represent more than 8% of net revenue, and the top 10 customers will represent less than 50% of net revenue.

Brave Bison most recent interim results released in September 2022 showed H1 22 revenues of £14.7m, more than double H1 21's £7.3m, and an adjusted EBITDA of £1.6m, more than triple H1 21's £0.5m. The company reported a pre-tax profit of £1m, up from £0.2m in H1 21 and net cash of £4.8m compared to £2.9m a year ago.

Following the £4.75m capital raise, Brave Bison will remain well-funded with net cash of £4.8m and undrawn credit line of £1.5m. An additional contingent consideration of up to £9.5m is payable over 3 years following completion of the acquisition, calculated on stretch performance targets based on EBITDA.

Brave Bison expects to meet or exceed current market expectations for the financial year ended 31 December 2022, with revenue expected to rise more than 30% year-on-year.

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