OREANDA-NEWS. Time Out Group plc, a multi-platform media and e-commerce business with a global content distribution network comprising magazines, online, mobile apps, mobile web and physical presence via live events and a Time Out market in Lisbon, today announces its initial public offering by way of a conditional equity capital raise (the "Capital Raise") and proposed admission to trading on AIM. Subject to the Capital Raise becoming unconditional, the Company will issue 60,000,000 Ordinary Shares at 150 pence per ordinary share (the "Issue Price") and will raise approximately ?90 million gross proceeds before expenses through the Capital Raise for the Company.

Liberum Capital Limited is acting as Nominated Adviser and Sole Bookrunner to the Company.

Highlights

•      Based on the Issue Price, the market capitalisation of the Group on admission to trading on AIM ("Admission") will be ?195 million.

•      The Company has conditionally raised ?90 million (before expenses) pursuant to the Capital Raise.

•      The net proceeds will be used to accelerate the Group's growth plans to scale and further monetise its platforms focusing on digital advertising, e-commerce and Time Out Markets.

•      On Admission, the Company will have 130,000,000 Ordinary Shares in issue.

•      Admission and commencement of dealings in Ordinary Shares under the ticker "TMO.L" are expected to take place at 8.00 a.m. on 14 June 2016.

•      The Company's ISIN is GB00BYYV0629 and its SEDOL is BYYV062.

Julio Bruno, Chief Executive Officer of Time Out Group, said:

"Since its inception 48 years ago, Time Out has been discovering the 'brilliant' and searching out the 'extraordinary' of city life. As we look forward to the next phase of our development, we will continue to put cities in the palm of consumers' hands, providing them with curated content across our platform and inspiring them to discover, book and share the best that the world's most exciting cities have to offer. 

This is a milestone event for Time Out and I'm delighted that investor demand has been strong. I'm pleased to welcome on board our new, high-quality institutional shareholder base and look forward to delivering on our strategy as a public company which includes further investment in the Group's digital, e-commerce and markets businesses"

Peter Dubens, Chairman of Time Out Group, added:

"Time Out has been an iconic brand for many years and now is the right time for it to float. We have a compelling platform for value enhancement which is very much focussed on continued investment in the brand, the e-commerce platform and replicating the Time Out Market concept in other cities."

The Company will also today publish its Admission Document on its website at www.timeout.com

Capitalised terms used in the Admission Document shall, unless the context provides otherwise, have the same meanings in this Announcement. The terms and conditions of the Capital Raise are set out in the Admission Document.

 

The Group's business description

The Group's core proposition is to produce inspirational and entertaining content for its users and to grow earnings from those user relationships through on-site transactions and advertisements from businesses, including brands and local businesses.

With ''owned and operated'' business operations in 65 cities across 15 countries, including key cities such as London, New York and Paris, the Group's content distribution network seeks to connect consumers and businesses in the leisure, travel and local entertainment sector through business-to-consumer (''B2C'') and business-to-business (''B2B'') offerings.

The Group has a presence in a further 42 cities across 25 countries and territories through the Group's international licensing arrangements. Pursuant to these arrangements, the Group grants rights to third parties to publish print magazines and produce digital content under the Time Out brand, generating revenue through the payment of fees and royalties by third party licensees.

The Group generates its revenue primarily from the sale of advertising across print and digital platforms and through e-commerce commissions generated by online bookings and transactions. Since July 2014, the Group has been developing a ''premium profile'' offering in London and New York, through which it allows businesses opportunities to increase their exposure to the Group's audience by purchasing additional advertising features on the Group's platforms for a monthly subscription.

The Group's history and background

Time Out was founded in 1968 by Tony Elliott (a Non-Executive Director) as a London magazine featuring content on culture and entertainment. The publishing brand expanded into new cities through both ''owned and operated'' business and international licensing arrangements. Time Out has since become an internationally recognised brand, providing users with an authoritative guide to what is happening in their city and/or a city they are planning to visit.

Oakley Capital Private Equity (''OCPE'') invested in the Group in November 2010 through the Oakley Shareholders with a strategy to transform what was a traditional print brand into a leading digital platform through the development of its digital offering, particularly around mobile. Since OCPE's initial investment, the Group has refined its strategy and invested in growing the Time Out audience and creating an enhanced technology platform to deliver a media and e-commerce offering across a diverse content distribution network.

In particular, the Group has:

•      grown its audience reach to approximately 111 million (including through its international licensing arrangements), which equates to a compound annual growth rate of 36 per cent since November 2010, and approximately 50 per cent of this audience access Time Out via a mobile device;

•      developed a multi-national content distribution network including online, mobile apps, mobile web and live events, broadening the media by which businesses can reach consumers;

•      developed a nascent e-commerce platform, which enables users in London, New York, Chicago and Los Angeles to complete a booking or transaction directly on the Group's platform;

•      developed new advertising products to allow businesses (including brands and local businesses) to target consumers through the Group's growing audience;

•      acquired the main licensee partners in New York, Chicago and Portugal and have started transitioning most of the existing licensees onto the Group's technology platform;

•      acquired an interest in the Time Out market concept in Lisbon, Portugal and developed the Time Out market concept, together with a roll-out plan for other cities, which the Directors believe will help to enhance the Time Out brand; and

•      has recruited an experienced executive management team with a strong background in digital media, e-commerce and technology businesses.

Key Strengths

•      An established international brand with an extensive audience reach: Time Out is one of the leading brands to inform and inspire users through the provision of curated content about how to enjoy food, drink, music, theatre, art, style, travel and entertainment. The Directors believe that the Group's established brand (since 1968) and high brand awareness are key drivers of Time Out's significant audience reach of approximately 111 million (including its international licensing arrangements), and that this will help to drive consumer traffic to the Group's digital platform and give users the confidence to use the digital platform to execute e-commerce transactions.

•      Strong relationships with brand and local advertising partners and a sophisticated model for generating advertising revenue: The Group has established long-term, direct relationships with brands and local businesses and uses a number of solution based advertising platforms, programmatic platforms and other creative channels, including native advertising and experiential advertising, to generate advertising revenue.

•      Diverse content distribution network including technology with multi-national scalability potential: The Directors believe that the scalable and flexible architecture of the Group's digital platform will allow the Group to develop on-going improvements in functionality and expand to address new business opportunities.

•      Attractive unit economics driven by significant consumer demand for the Group's independent, inspirational and curated content: The Directors believe that the Group's audience reach of approximately 111 million (including its international licensing arrangements) lowers the marketing cost of acquiring users and makes it easier to transition users from content consumption to e-commerce. In the context of its increasing audience reach, the Directors believe that the Group is well-placed to continue to benefit from attractive unit economics, the reach it can obtain on social media platforms and the growth of its digital presence.

•      Successful Time Out market concept with international roll-out potential: The first Time Out market in Lisbon received approximately 1.9 million visitors in 2015 and achieved positive EBITDA within 18 months of opening. The Directors believe that the Lisbon market concept presents a scalable opportunity that can be replicated in other cities, expanding the Group's international presence and raising the profile of the Time Out brand.

•      Experienced management team: The Group has recruited an experienced executive management team with a strong background in digital media, e-commerce and technology businesses.

•      Detailed and growing user data: The Group's digital platforms, Flypay technology and free wi-fi in the Time Out market in Lisbon will provide the Group with a source of valuable user data and information which the Group can leverage in order to increase its revenue from e-commerce.

Strategy

The Board believes that the Group is well-positioned to scale and further monetise its platforms (in particular its digital platforms) by doing the following:

•      monetise its audience via e-commerce: the Group intends to increase the number of transacting users on its e-commerce platform by improving transaction capability, integrating more partners and new product verticals into the platform, enhancing data management and personalisation and expanding its e-commerce offering into cities where it has a large user base.

•      monetise businesses via digital and other advertising expertise: the Group intends to broaden its digital advertising propositions to new content offerings, including video and social media, and to leverage its expertise around both creative and programmatic advertising solutions to expand the Group's offering and appeal across the wider geographic network.

•      monetise local businesses via premium profiles: the Group is seeking to improve the quality of the data and content it provides to its local business partners, as well as offering them additional self-service products, in order to broaden reach to the Group's audience (including self-listed events and discount vouchers). The Directors also believe that the Group's strategic investment in Flypay will enable it to integrate more closely with its larger partners in the leisure and hospitality space.

•      roll-out the Time Out market concept: the Directors believe that the Time Out market concept has the potential to attract millions of customers and to enhance customers' physical and digital connection to the Time Out brand. The Group sees opportunities to expand the market concept internationally and is in advanced discussions, but has not yet entered into any binding arrangements, regarding potential new markets in London, New York, Miami, Berlin and Porto.

•      support its international licensing network: the Group sees further opportunities to increase revenue from its international licensing arrangements by transitioning licensees to the digital platform, and intends to roll out digital best practice to licensees internationally.

Reasons for the Capital Raise and Admission

The Directors believe that the Capital Raise and Admission will provide capital for Time Out's next stage of development, further enhance the Group's profile and brand recognition with consumers and businesses and assist the recruitment, retention and incentivisation of senior management and employees at all levels of the Group.

Use of proceeds

The net proceeds of the Capital Raise receivable by the Company after the repayment of the Group's outstanding shareholder debt and the payment of costs and expenses of the Capital Raise are expected to be approximately ?58 million and are intended to be used for:

•      Capital expenditure and investment to roll out the Time Out market concept: approximately ?20 million is expected to be invested in the geographical expansion of the Time Out market concept to new cities, including sourcing and design of new leased premises, physical infrastructure improvements and site fit-out, recruiting local management teams, marketing and technology (e.g. electronic point of sale and free wi-fi).

•      Investment in sales and marketing: the Group plans to invest approximately ?15 million on sales and marketing to increase consumer awareness through repositioning the brand and driving awareness of the Group's offerings in the e-commerce space. In particular, the Group intends to reposition its marketing efforts to focus on building in-house digital marketing capacity by increasing headcount and engaging in paid social media. The Group also plans to re-target its marketing spend to: (i) increase its use of direct advertising, email marketing, promotions and Google Ad Awards; (ii) enhance ''gamification'' by increasing rewards via the Time Out Card and mobile app; and (iii) develop a CRM tool to harness data more effectively.

•      Investment in technology and product: approximately ?10 million is expected to be used to enhance the effectiveness of e-commerce and drive expansion into new verticals and a new user interface, improve the premium profiles service, establish a data warehouse, improve user integration and Flypay integration, in addition to expanding the Group's team of technical employees. The Group also intends to invest in the development of its management information platform to ensure it is able to better use the data it already has to drive CRM.

•      Commercial teams: the Group plans to invest approximately ?5 million in expanding the commercial team with a focus on premium profiles, creative advertising solutions, content moderation and e-commerce partner acquisitions.

•      General corporate purposes: the Group plans to retain the balance of the net proceeds, being approximately ?8 million, for general corporate purposes, including as additional working capital, strengthening the balance sheet and allowing the Group to meet its obligations and commitments as they fall due.

 

Biographies of the Directors are set out below:

Peter Dubens (aged 49), Non-Executive Chairman

Mr Dubens joined the Group in November 2010 as a Non-Executive Director and was appointed Non-Executive Chairman in June 2016. Mr Dubens is the founder and Managing Partner of the Oakley Capital Group, a privately owned asset management and advisory group comprising Private Equity, Venture Capital, Corporate Finance and Capital Introduction operations managing over €1.1 billion. Mr Dubens founded Oakley Capital in 2002 to be a best of breed, entrepreneurially driven investment house, creating an ecosystem that supports the companies the Oakley Capital Group invests in, whether they are early-stage companies or established businesses. The vision of Oakley Capital has always been to encourage and back entrepreneurship. To that end, Oakley Capital Private Equity invests in and supports the continued growth and development of some of Europe's leading companies, including the iconic sailing brand, North Sails and Facile, Italy's leading price comparison website. Mr Dubens has substantial AIM company experience, having previously held the position of Chairman of Pipex Communications plc, 365 Media Group plc and Daisy Group plc. Mr Dubens is currently a director of Oakley Capital Investments Limited.

Julio Bruno (aged 51), Chief Executive Officer

Mr Bruno joined the Group in October 2015 as Executive Chairman and was appointed Group Chief Executive Officer in June 2016. Mr Bruno has assisted a range of companies on their global expansion plans and investment strategies in the travel, media, e-commerce and technology sectors. Mr Bruno was previously Global Vice President of Sales for TripAdvisor, leading a global sales team with bases in Newton, Massachusetts, London, Oxford and Singapore. Prior to working for TripAdvisor, Mr Bruno worked at Travelport as Vice President for Canada, Latin America & the Caribbean, during which time Travelport opened new offices in Colombia, Chile and Uruguay. Prior to working at Travelport, Mr Bruno worked at Cendant Corporation, where he was Managing Director (President) of Continental Europe & South America, leading several business units within their B2B division, namely, Galileo, Gulliver's Travel (GTA) in-bound, Octopus Travel B2B and Travelwire. Prior to joining Cendant, Mr Bruno held several senior positions internationally, including positions as Group Global Accounts Director at Regus plc and Managing Director at Energizer Corporation for Northern Europe. Mr Bruno has also previously worked in consumer goods at Diageo plc, based in London and subsequently the USA, managing third party sales operations and services for Latin America and the Caribbean.

In parallel with his operational work, Mr Bruno also engages with the entrepreneurial community, acting as an angel investor and board adviser to a number of start-up businesses worldwide, including CoverWallet.com, audicus.com and chatme.com. Mr Bruno is a director of Alma Mundi Ventures, a venture capital firm focussed on technology start-ups, and is also a director of Flypay.

Mr Bruno holds a Master's degree in International Business from the University of London and a post-graduate certificate on leadership from Wharton, University of Pennsylvania.

Richard Boult (aged 50), Chief Financial Officer

Mr Boult joined the Group in April 2016 as Chief Financial Officer. Mr Boult was previously Group Finance Director at BCA Marketplace plc, including at the time of its listing on the main market of the London Stock Exchange. Prior to joining BCA Marketplace, Mr Boult held a number of senior finance roles at both group and regional levels in major listed companies including Wolseley plc, Darty plc and 21st Century Fox Inc.

Mr Boult has a degree in Computer Science from the University of Cambridge and qualified as a Chartered Accountant with PricewaterhouseCoopers LLP in London.

Lord Rose of Monewden (aged 67), Non-Executive Director

Lord Rose joined the Group in December 2015 as Chairman of Time Out Market Limited and was appointed as a Non-Executive Director in June 2016.

Lord Rose has led a distinguished 40-year career in retail, including as Chief Executive and then Chairman of Marks & Spencer plc (2004-2010). Lord Rose has also held Chief Executive positions at Arcadia Group plc, Booker plc, and Argos plc. Lord Rose is the current Chairman of Fat Face Group, Oasis Healthcare Group, Majid Al Futtaim Retail, Dressipi and Ocado and a non-executive director of the board of Woolworths Holdings Ltd (South Africa).

Lord Rose was knighted for services to the retail industry and corporate social responsibility in 2008 and was elevated to the House of Lords in 2014. Lord Rose is a member of the Audit Committee and the Remuneration Committee.

Alexander Collins (aged 45), Non-Executive Director

Mr Collins joined the Group in November 2010 as a Non-Executive Director. Mr Collins is a Partner at Oakley Capital Private Equity and has 19 years of private equity investment and operational experience, including originating and structuring transactions in a range of sectors and geographies, including growth equity, MBOs, restructuring and turnaround situations. Mr Collins joined Oakley Capital Private Equity in 2007 as one of the founding partners and has been an investment and board director of a range of international businesses including Host Europe, Emesa, Intergenia, Verivox, North Sails and Facile.

Prior to joining Oakley Capital Private Equity, Mr Collins started his career at GE Capital in 1995 before being seconded to Advent International for two years as an Associate Director. He subsequently joined Henderson Private Capital as Principal and was then a Partner at Wharfedale Capital, where he was involved in the purchase of secondary direct private equity assets.

Mr Collins holds an MSc from the London School of Economics and a BA in Economic History from Union College, New York.

Christine Petersen (aged 52), Non-Executive Director

Ms Petersen joined the Group in February 2016 as a Non-Executive Director. Ms Petersen is the Chief Consumer Officer and CMO of Treato, an Israel-based venture-backed start-up company in the digital healthcare sector. Ms Petersen previously spent nine years with TripAdvisor, serving as President of TripAdvisor for Business from 2010 to 2013 and as Chief Marketing Officer from 2004 to 2010. Prior to working for TripAdvisor, Ms Petersen served in a variety of management roles in digital travel and financial services, including Preview Travel, Travelocity (upon Preview Travel's acquisition by Travelocity), Charles Schwab and Co. and Fidelity Investments. Previously, Ms Petersen began her career with American Express in 1989.

Ms Petersen serves as a Board Director to Bankrate, Inc. (a NYSE-listed company), sitting on both the audit and remuneration committees, and acts as an adviser and/or investor in several start-up businesses.

Ms Petersen is an MBA graduate of Columbia University and previously graduated from Colby College with a BA in Economics.

Ms Petersen is a member of and chairs each of the Audit Committee and the Remuneration Committee.

Tony Elliott (aged 69), Non-Executive Director

Mr Elliott founded Time Out in 1968 with ?70 during a summer break from Keele University. The Time Out magazine was initially a folded-down poster equivalent to eight pages of today's printed format that Mr Elliott handed out himself. The range of curated content sought to reflect the best of what was happening in London together with a focus on the issues of the day and laid the foundations for the Time Out brand's coverage and culture today.

Over the years, Mr Elliott transformed Time Out into a global media brand and, in November 2010, sold a controlling share of Time Out to Oakley Capital to provide operational support and investment to bring the brand back under common ownership and to develop the digital platform.

Mr Elliott has been a Non-Executive Director of the Company since November 2010, having previously served as Executive Chairman of Time Out since its founding in 1968.

Mr Elliott is currently a director and/or trustee of a number of cultural institutions including The Roundhouse (he also serves as Vice Chair), Somerset House Trust and Somerset House Enterprises Ltd, Human Rights Watch (UK charity), Granta Publications and Create London.

In addition, Mr Elliott has previously acted as a director and/or trustee of Human Rights Watch's London Committee (founding Chair), HRW International Board, Film London, Soho Theatre Company, The Photographer's Gallery, The British Film Institute (Governor) and BFI Production Board (Chairman).

In May 2014, Mr Elliott received the prestigious Goodman Award, which honours an individual who has made an outstanding long-term contribution to the arts in a voluntary capacity.