Content no longer king as Isentia ‘cauterises acquisition’; returns to media monitoring
Link copied to
Cultural fit has been blamed for the failure of Isentia’s $48 million King Content acquisition — a failure the group’s boss this week described as “deeply disappointing”.
Earlier this year Isentia (ASX:ISD) wrote down the investment by $39.4 million and announced in October it would exit the business.
King Content lost $4.4 million last year, contributing to a 19 per cent fall in Isentia’s EBITDA earnings to $41.5 million.
Retiring chairman Doug Flynn told shareholders despite their best due diligence, the merger had been a flop.
“We are assessing what went wrong ‐ yet at this stage it is clear that the cultural fit of the two businesses did not work and the non‐subscription, campaign‐style of client work resulted in an unpredictable revenue stream,” he said.
Shares in the media monitoring service (ASX:ISD) have dropped 60 per cent since highs of $2.81 in February. They were trading at $1.08 on Thursday.
At the time of the investment in the content marketing business, shares were trading as high as $4.90.
Chief executive John Croll said the company would refocus on core competencies.
“We have cauterised an acquisition and are focused on restoring growth in the underlying business,” he told the AGM.
“Through the courts we have protected our valuable IP from competitors, ensuring our value proposition stays with Isentia.”
With clients in 11 countries across Australia and Asia, they say they are the leaders in the Asia-Pacific market, with a 27 per cent share, and are well positioned for growth as the market consolidates.
They aim to complete the King Content exit by the end of the year and have set guidance of between $133 and $138 million in revenue for the financial year.