Social Chain Group eyes $220m turnover, makes biggest acquisition
Social media agency Social Chain AG is set to complete its largest acquisition to date as it prepares to take a 51 percent majority stake in A4D Inc.
Close of the transaction for the Southern Californian digital marketing specialist is scheduled for the end of May.
UK-headquartered Social Chain is already operating its US arm from New York, with customers including Uber and Twitch.
Founded and headquartered in Manchester in 2014, it now has 700 employees across offices in Berlin, London, New York and Munich.
It plans to have at least 50% of its revenues in the US market by 2022, where currently around half of the 80 million followers of its social media channels reside.
A4D, the user acquisition focused advertising network, employs 40 people and has an annual turnover of more than $35m. It was founded in 2004 by Jason Akatiff, who will remain on board as CEO following the deal.
Social Chain has also announced its first turnover and profit forecast for 2020 since the merger of Lumaland AG and The Social Chain Group AG the previous year.
Based on the current business performance, the Management Board expects a pro-forma consolidated turnover of approximately $220m and a positive EBITDA of $9m.
On the acquisition CEO and co-founder of Social Chain Steven Bartlett said: “Our fastest growing international market over recent years has been the U.S. In 2019 we saw our revenue increase by over 150% in the U.S. We see it as possibly the world’s most important advertising market and plan to expand aggressively in that region over the coming years.
“This is the just one of many steps in strengthening our global marketing services proposition in a substantial way.”
Jason Akatiff, CEO and Founder of A4D, added: "I look forward to working together with SOCIAL CHAIN. With its integrated understanding of social, technology, creativity and brand management, the A4D team has found a new, inspiring and global home."
Addressing the company's strategy during COVID-19, Bartlett said that the crisis has had an impact on its marketing services business but it was quick to implement cost-saving measures in order to limit the impact of the disruption and safeguard its team.
“We are now forecasting strong growth for Q3 and Q4,” he said.
"The COVID-19 crisis has been the truest test of nimbleness and resilience for companies and their leaders – and Social Chain has proven that its new-age, end-to-end and diversified model of owning social media audiences, owning the marketing capabilities and owning the products, is a model capable of weathering even the most torrential storms.”