King Content has been acquired by Isentia (ASX: ISD).
Isentia, which was known as Media Monitors until it rebranded in 2013, finalised the deal to buy the five-year-old agency last night. The acquisition is the first major Australian deal to be done in the fast growing content marketing space.
If King Content hits its earnout targets over the next five years, the deal will be worth $48m to its owners, including founder Craig Hodges.
John Croll, CEO, Isentia
Isentia CEO John Croll told Mumbrella: “For quite some time now, Isentia has been looking at how we can work across owned, earned and paid media. Our clients are already getting a lot of information from us in this space, but they are also asking us to help with their strategy.
“King Content is the market leader.”
King Content, which is based in Sydney, also has offices in Hong Kong, Singapore, the UK and the US.
King Content is not the first agency bought by Isentia. The organisation acquired social media agency Two Social in 2013. And in 2012 it bought social media analysis firm Buzz Numbers.
Croll dismissed recent suggestions triggered by the demise of the Content Marketing World Sydney event that the trend towards content marketing is beginning to level off. He said: “I’ve done a lot of work with consultants in the market and we still see a real growing need from major brands to connect with their audiences through content marketing.”
Specialist content marketing agencies in Australia are currently estimated to be generating annual revenues in the region of $100m, with King Content thought to have around 15 per cent of the market.
Croll said that one of the attractions of the acquisition is the agency’s content marketing platform Communique, which manages workflow for clients and offers analytics on campaign performance.
He said that Isentia would also be able to help King Content grow its footprint in Asia, and particularly China. King Content will remain a separate brand to Isentia and stay in its own offices, Croll said.
Isentia runs 21 offices across Asia Pacific. The company was created following the merger of Media Monitors founded by Ian Parry-Okeden and Croll’s Media Monitoring founded by Richard Croll, which both began life in the late 1970s. Isentia listed on the ASX in June last year and has a market capitalisation of around $680m. Croll told Mumbrella: “I certainly think we can be a billion dollar company, but I will leave it up to the market to decide when that happens.”
Craig Hodges, CEO, King Content
Today’s annual results announcement to the ASX saw Isentia report a 15 per cent revenue growth to $127.3m and EBITDA profits reaching $45m.
Hodges said: “We are delighted to become part of one of the most dynamic public companies in the communications and information space. This gives us the solid base to be able to capitalise on our recent rapid growth, scale the business rapidly and take full advantage of the continuing revolution in corporate content creation and content strategy across the globe.”
He told Mumbrella that a number of other potential purchasers, including international agency holding groups, had been interested in buying King Content before the decision to go with Isentia. Hodges said: “We want to continue to grow and we felt that Isentia were the best partner to do that. They’ve got a great client base. When we get in front of the right people, we’ve got a good track record of turning that into business.”
Asked whether, the agency would hit its projected numbers to deliver the full $48m, he simply replied: “Yes.”
Hodges said that opportunity for growth would come both from Australia and further afield, he said: “Obviously we are very excited about Asia. We are only scratching the surface from a content marketing perspective in those markets.”
The acquisition of King Content will now see the focus of potential buyers switch to other independently owned content agencies including the likes of Mahlab Media, Red Engine, Edge and Newsmodo.
“This is a very exciting day for us, and I would like to thank all of our clients sincerely for the contribution you’ve made to our success. I look forward to delivering even greater service to you going forward.”