TLA Worldwide has strengthened its presence in Australia with the acquisition of Elite Sports Properties in a deal worth up to $19.5 million.
Under the terms of the deal, which was announced last week, TLA is paying an initial $10.3 million for the Australian-based agency. The amount will be split into a cash payment of $7.7 million and the allocation of more than 3.9 million TLA shares at 2 pence each. TLA shares, which are publicly traded on the London Stock Exchange’s submarket AIM, were priced at 43.36 pence each based on the average closing market price over the seven days prior to the completion of the deal.
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| PRINCIPE |
In addition, TLA will pay $9.2 million based on certain performance conditions over a five-year period. TLA Worldwide CEO Michael Principe declined to provide further details on those conditions. However, the performance-based payments will be split into two tiers, with the first half paid for conditions achieved by Dec. 31, 2017, and the other half for conditions achieved by Dec. 31, 2019.
Principe said TLA already has a connection to Australia with the expansion of the International Champions Cup to the country. He added TLA is confident Elite Sports Properties can help build on that momentum.
“ESP is adding value to the properties that we are producing there in terms of sponsorship procurement, hospitality, PR and activation,” Principe said. “What ESP does for us is it expands our international footprint and enhances our service offering to clients both individual and corporate.”
The deal will increase TLA’s client base by 250 to more than 700. ESP, which was established in 1996, is currently run by former Australian Football League player Craig Kelly and Rob Woodhouse, a former Australian Olympic swimmer.
“The entire management team is staying with the business,” Principe said. He added that the acquisition of ESP creates no redundancies in staff, and all personnel is going to be additive. The combined staff of the newly created operation will be around 150.
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Elite Sports Properties has rights to the 2015 Cricket World Cup.
Photo by: GETTY IMAGES
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ESP has offices across Australia and in England. TLA has 10 offices worldwide, including shops in London, New York, and Sydney and Melbourne, Australia.
TLA has no plans of rebranding ESP, given the company’s track record in Australia, Principe said. ESP, which reported earnings of $1.5 million before interest and tax for the year ending June 30, 2014, will bring high-profile properties to TLA. These include the 2015 Cricket World Cup, being staged in Australia and New Zealand, and the Rugby World Cup 2015, plus brands such as Adidas and Carlton & United Breweries.
“ESP allows us to further diversify our business internationally and offer along with our existing business more services to brands and properties that are unlocked by our talent representation business,” Principe said.
ESP sees benefits as well.
“The benefits of the TLA connection will allow us to use the knowledge and clout that TLA have out of the United States to drive the ESP business and take things to the next level in service, ideas and innovation for our clients and talent,” said ESP Chief Executive Kelly.
HJ Mai is assistant managing editor for SportsBusiness Daily Global.
