Zinc Media Group PLC on Wednesday said it agreed to buy The Edge Picture Co Ltd, a UK-based brand and corporate film production company, for an initial £1.2 million.
Shares in Zinc fell 8.6% at 98.25 pence on Wednesday morning in London.
The Edinburgh-based content creation company explained the initial consideration comprises of £1.56 million in cash and £540,000 through the issue of 540,000 Zinc shares at 100 pence each.
A further £3.9 million, conditional on the performance of The Edge over the next three years, will be satisfied through a combination of cash, share issues and/or the issue of loan notes.
Zinc on Wednesday announced a fundraise to finance the acquisition. The firm raised £5.0 million from a placing of 5.0 million shares, also at 100p, and it said will raise up to £250,000 more from a retail offer at the same price.
The Edge reported £500,000 in pretax profit on £8.2 million in revenue in 2021. At June 30, The Edge booked £8 million in revenue for 2022.
The firm said the acquisition will add scale to the existing group, support long-term profitability and present organic revenue growth opportunities. It expects The Edge to be earnings accretive in the current and future financial years.
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