Ingenious sells Digital Rights to Modern Times for £13.2m

Ellie Pullen
13 June 2013

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Ingenious Media Active Capital (IMAC), a closed-ended investment company managed by Ingenious Ventures, has sold its stake in Digital Rights Group (DRG) to Swedish broadcaster Modern Times Group (MTG) for ТЃ13.2m.

MTG acquired a 92.4% stake from Ingenious and a number of DRG's private shareholders. The remaining 7.6% stake in DRG is owned by the company's incoming CEO, Jeremy Fox, and other members of the management team. The transaction has given the company an enterprise value of £15m.

The sale includes all loan notes previously provided to DRG by IMAC, which amounts to £7.1m including accrued interest. Ingenious's return on the sale is equal to a 2x money multiple when taking past repayments of loan notes made by DRG into account.

According to Ingenious, £800,000 of MTG's £13.2m cash consideration to the firm will remain in escrow for a maximum of 18 months. IMAC is currently in the midst of divesting its portfolio, a process it began in 2010, and has so far returned approximately £64.4m to shareholders.

Ingenious first invested in DRG in December 2006. The firm provided £3m to the group and followed on its investment with a further £3m injection into the company in June 2007.

Ingenious then committed an additional £5.3m to the company the following November, bringing the total to £11.3m.

Company
Headquartered in Covent Garden, London, DRG was founded in 2006 and currently employs 32 staff. The company recorded revenues of £23.4m for 2012/13, as well as an EBITDA of £1.6m.

DRG is a TV rights distribution group that provides international distribution of programmes for TV producers. The company acts independently, acquiring rights to finished programmes and selling them on to international broadcasters.

People
DRG's current group managing director, Jonathan Jackson, is being replaced by incoming CEO Jeremy Fox, who was previously CEO and founded the company.

Patrick Bradley, a director at Ingenious, sat on DRG's board as a non-executive director.

Advisers
Vendors – Ingenious Corporate Finance, Chris Graves, Laura Maddison, Charlotte Wilkerson (Corporate finance); Marriott Harrison (Legal).