SurfStitch, the Australian online clothing retailer, has made another content play, this time action and extreme sport video producer Garage Entertainment.
In the latest deal, SurfStitch will pay $15 million in cash and shares for Garage Entertainment and its associated company TMG, which produces and digitally distributes premium action and extreme sports long form films and TV content.
The high growth retailer earlier this year bought a surf weather site, Magicseaweed, and a global online news magazine, Stab Magazine, for $13.8 million cash and 4.8 million shares.
The content has been a key factor in the company’s sales growth. SurfStitch is on track to double full year earnings to between $15 million and $18 million.
Garage Entertainment, founded by Nick Cook and Mick Lawrence in Sydney in 2009, has the largest library of actions sports online with more 3,000 titles which it distributes through its own video-on-demand platform and dedicated TV channels.
Assets include the acclaimed Australian documentary Bra Boys, the TV series The Crew and Missing, a top 5 download in the iTunes chart.
SurfStitch’s vision is to become the global leader in action sports and youth lifestyle.
“Our demographic spends 1.2 hours a day on online TV, second only to social networking,” says SurfStitch CEO Justin Cameron.
The company has no immediate plans to pay dividends. Cash will continue to be reinvested in growth.
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