NewPort Capital acquired and merged Orange Valley, MvH Media, AdResults and Increase

Stem op deze deal via de stempagina: https://mena.nl/genomineerden-best-small-cap-deal-2024/

Name of the deal: NewPort Capital acquired and merged Orange Valley, MvH Media, AdResults and Increase
Date announced: 18 April 2024
Date closed: 18 April 2024
Published value: Financial details not disclosed – combined deal value below EUR 50m
Buyer(s): Majority: NewPort Capital (NewPort Buyout Fund II Coop. U.A.)  Minority: Reinvestment of 3 out of 4 sellers
Target: MvH Media B.V.  OrangeValley B.V. and OrangeValley Tech B.V.  Increase B.V. AdResults B.V.
Seller:
MvH Media: Mark van Hattum via M.M.M. B.V.
OrangeValley: Ortwin Verreck via OrangeValley Groep B.V.
Increase: Martijn van Dijk and Marco Schuurman via Men4Media B.V.
AdResults: Robert Slijm and Robert Schippers via OQ MEDIA HOLDING B.V. and ADIQUE HO

Involved firms and advisors

Involved firms and advisors buy side 

• Financial: BDO (Koen van den Heijkant, Lars Hottentot, Krista Treur)
• Legal: CORP. advocaten (Diederik Baas, Justin van Angelen)
• Tax: JSA Tax Consultancy  (Ronald van der Merwe, Olaf Kroon)
• Debt advisory: KwikGielen (Laurens Koelewijn)
• Notary: Zuidbroek (Cindy Smid, Puck Stolk)
• LMA: Hogan Lovells (Wouter Jongen, Dylan Goedegebuure, Jorien Oost)
• AI: GenAI Strategy AI (Wouter van Haaften)

Involved firms and advisors target

• MvH Media:
  • Sell-side: Marktlink (Niek Derks, Vincent Harboe Sørensen, Zeb de Haas)
  • Legal: DeBreij (Laura Overes)
• OrangeValley:
  • Sell-side: Marktlink (Niek Derks, Vincent Harboe Sørensen, Zeb de Haas)
  • Legal: Ploum (Nick Hessels)
• AdResults:
  • Sell-side: Marktlink (Ralph Meijer, Laurens Heideman, Wilmar van der Meulen)
  • Legal: Marktlink legal (Simone Kriekaart)
• Increase
  • Sell-side: Matchplan (Rens Knevels, Yvo Bruin)
  • Legal: Matchplan legal (Matthias Duijzer)

Pitch

Deal Outline
On 18 April 2024, OrangeValley, MvH Media, AdResults and Increase have merged, forming a new performance marketing group backed by NewPort Capital.

This merger combines nearly 200 employees across six locations in the Netherlands and Belgium, positioning the group to expand its data-driven marketing expertise across Europe. Mark van Hattum of MvH Media will serve as CEO and the group will initially maintain their separate brands, with plans for a new collective name. The primary goal is to leverage increased scale for innovation, data access and deeper performance marketing services, which also helps to attract and retain top talent. NewPort Capital will support the group with a buy-and-build strategy to drive European growth and market leadership.

About MvH Media
MvH Media is a leading digital marketing agency specializing in performance-driven strategies. With expertise in search engine optimization (SEO), pay-per-click (PPC) advertising, and social media marketing, MvH Media helps businesses enhance their online presence and achieve measurable results. The agency’s approach combines data-driven insights with creative solutions, ensuring tailored strategies that align with client goals.

Founder and director of MvH Media, Mark van Hattum, will take the lead in the new group.

About OrangeValley
OrangeValley is a dynamic digital marketing agency focused on performance optimization. They specialize in search engine marketing, data analytics, and conversion optimization to help businesses increase their online visibility and drive growth. With a team of experienced professionals, OrangeValley combines innovative strategies and cutting-edge technology to deliver tailored solutions that meet clients’ unique needs.

About Increase B.V.
Increase is a leading digital marketing agency that specializes in performance marketing and data-driven strategies. They focus on optimizing customer journeys and enhancing online conversions through innovative solutions tailored to client needs. With a dedicated team of experts in various digital disciplines, Increase leverages technology and analytics to deliver measurable results for businesses.

About NewPort Capital
NewPort Capital, a Dutch private equity firm, has acquired OrangeValley, a Dutch online marketing agency. With an active buy & build strategy, NewPort Capital aims to make its new group, consisting of MvH Media, OrangeValley, Adresults and Increase, an authority in Western Europe in the field of performance marketing.

The capital of the current fund, NewPort Buyout Fund I & II Coöperatief U.A. (€240 million), has been raised through a combination of successful Dutch entrepreneurs, family offices, and several institutional investors from Europe and North America, supplemented by the NewPort team. With over 100 entrepreneurs from more than 25 different sectors on its side, NewPort is genuinely an entrepreneurial and engaged investor. Its strength lies in providing strategic, financial, and operational expertise, a broad network, and growth capital.

NewPort focuses on investments in established Dutch companies with an operational annual profit of €2 to €10 million across sectors such as ICT, food, packaging, manufacturing, and financial and business services. NewPort enjoys collaborating with and supporting entrepreneurial management teams to achieve both organic and acquisition-driven growth.

With an active buy-and-build strategy, NewPort Capital aims to establish the new group as an authority in performance marketing in Western Europe.

Why This Deal Should Win the Award for Best Deal Small-Cap 2024
The merger of MvH Media, OrangeValley, AdResults and Increase is a deserving contender for the ‘Best Deal Small-Cap 2024’ (together referred to as “European Performance Agency Group” or “EPAG”). This transaction, involving the simultaneous acquisition of four leading performance marketing agencies, stands out for its complexity, scale, and the potential it creates for growth in the performance marketing industry across Europe. It represents not just a consolidation, but the start of a new leading platform, strategically positioned for further buy-and-build activities supported by NewPort Capital.

The deal strategically positions EPAG as a pure performance marketing player, standing apart from the full-service digital agencies that dominate the market. This move addresses a key “white space” in the highly fragmented digital marketing landscape. The shift toward first-party data marketing due to changing EU cookie regulations underscores the relevance of this focus. By combining the expertise of four award-winning performance marketing agencies, the merger sets the foundation for a more data-driven, results-oriented approach that appeals to businesses increasingly seeking measurable marketing outcomes.

Market opportunity 
With the acceleration of e-commerce, a greater focus on digital advertising and tighter regulatory constraints, businesses are in need of the best performance marketing services that drive measurable results. EPAG’s consolidation of over 200 employees across multiple offices in the Netherlands and Belgium and its servicing of over 600 clients—from SMEs to international brands—immediately establishes it as one of the largest performance marketeers in the Benelux.

This not only bolsters its competitive positioning in the region but also provides a strong platform from which to expand into other European markets.  EPAG’s clear ambition to lead the market in performance marketing across Europe speaks to its future growth potential. The merger significantly enhances the company’s ability to tap into growing demand for performance-driven services and adapt to market shifts (for which substantial size is required to keep up), ensuring its long-term relevance and competitiveness. Only by having sufficient scale as an organization can you keep up with an ever-changing digital landscape. Scale also enables better (training) conditions to attract and retain talent.

Buy-and-build strategy
The execution of four parallel acquisitions underscores the ambition and confidence behind the transaction. This is not merely a consolidation of businesses, but the foundation for an active buy-and-build strategy designed to accelerate growth both organically and through further acquisitions in the Benelux and across Europe. EPAG’s initial focus is on solidifying its position in the Benelux region while laying the groundwork for the next phase: expanding internationally by targeting growth alongside international clients and strategic acquisitions. This approach not only allows EPAG to scale rapidly but also provides the flexibility to deepen its service offering, with an eye on acquiring capabilities that further enhance its performance marketing expertise (e.g. in the area of data analytics, social media, marketplaces). EPAG’s ability to quickly integrate these acquisitions speaks to its well-structured leadership and vision.

Complexity and execution of four M&A processes
One of the challenging aspects of this merger was the simultaneous acquisition of four companies, all closed on the same day (18 April 2024). The level of coordination required to successfully navigate four separate M&A processes highlights the focus and ambition of all the parties involved. Each company came with its own unique challenges—legal, financial, and operational—and to manage these complexities in parallel demonstrates a level of skill and dedication from all the teams involved. This consisted of a broad group of advisors with a strong presence in the ‘small cap’ M&A market, being the following firms: BDO, JSA, CORP., KwikGielen, Marktlink Amsterdam & Groningen, Matchplan, Zuidbroek, DeBreij and Ploum.  In addition to the transaction process, a deal with four companies who regularly encounter each other at events and pitches for the same clients added even more complexity on the seller’s side due to potential risks of reputational damage and confidentiality issues.

Financials and deal structure
A highlight of this transaction is the creation of a strong platform with an EBITDA of over €5 million from day one. This foundation offers stability and immediate scale, positioning the newly formed group for further expansion, particularly through the buy-and-build strategy. Backed by NewPort Capital, this financial framework sets the stage for sustained growth, where the group aims to become the European leader in performance marketing. While the financing structure through OLB (Germany-based Oldenburgische Landesbank) may not be groundbreaking, it is well-suited for this multi-company acquisition and future growth plans, ensuring that the necessary resources are in place to support long-term objectives.

Visionary leadership and entrepreneurship
Moreover, leadership plays a central role in the success of this deal. Mark van Hattum, as the new CEO of EPAG, has been instrumental in guiding this merger, bringing together different companies, teams, and cultures under one unified vision. His ambition and drive to create a strong, progressive organization that focuses on both innovation and talent development are key to the group’s future success. Together with the broader leadership team, he ensures that EPAG not only thrives operationally but also unite their teams under a shared mission to become the best data-driven performance marketing specialist in Europe ensuring the group is attractive to both current employees and potential talent, which is crucial in the competitive digital marketing industry.

In conclusion, the complexity of this deal, combined with its strategic execution and immediate impact, makes it a contender for the ‘Best Deal Small-Cap 2024’. It successfully balances complexity with vision and has positioned the new group – EPAG – to make a lasting impact on the performance marketing landscape in Europe.

Deal Rationale
The rationale behind the creation of EPAG through the merger of MvH Media, OrangeValley, AdResults and Increase rests on five pillars (based on NewPort’s investment criteria):

1. Sector
   The digital marketing sector is experiencing rapid growth, driven by the transition to performance-based models. EPAG’s focus on performance marketing—a.o. SEO, SEA, marketplaces, and programmatic advertising—meets the demand for measurable results. EPAG differentiates itself from the ‘full-service’ digital agency consolidators, positioning itself in a high-margin segment with increasing relevance due to regulatory shifts from third-party to first-party data strategies.
2. Business(es)
   Each of the four agencies has a strong track record of growth and profitability, driven by proven entrepreneurship and highly talented teams. These agencies are attractive not only for their financial stability and performance (with EBITDA margins of 25-30%), but also for their sticky revenue models. The merger of these four companies creates a powerhouse with the financial strength, talent and client base to further accelerate growth through acquisitions.
3. Team
   The management team consists of industry veterans and entrepreneurs who have successfully scaled businesses. Their commitment to the long-term success of EPAG (due to reinvestments of sellers and participation of other key employees) is critical for driving the next phase of growth. By combining their individual expertise, the team is positioned to lead EPAG toward its vision of becoming Europe’s leading performance marketing group.
4. Strategy
   The buy-and-build strategy is at the heart of the deal. With a fragmented market in performance marketing, there are ample opportunities for further consolidation in the Benelux and wider European markets. This strategy will enable EPAG to scale quickly, increase its market share and broaden its capabilities.
5. Exit
   The strategy for a potential exit is built around creating a leading European performance marketing player. We believe there is appetite from (next-level) private equity and strategic buyers for a group such as EPAG.

Impact of This Deal on the Company
The immediate impact of the deal for EPAG is transformative. The merger results in increased scale, providing the company with a leading market position in the Benelux region. This scale brings operational efficiencies and enhances the ability to innovate, particularly in data analytics and specialisations such as marketplaces or social. This increased scale is also needed to keep up with innovation in an ever-changing digital landscape.

EPAG is now better positioned to attract and retain top talent and expand its geographical footprint, laying the foundation for further acquisitions. The combined businesses can offer a more comprehensive service portfolio to its clients, enhancing cross-sell opportunities and boosting customer retention.

Furthermore, the merger establishes us as a leading knowledge partner and supplier for top tech companies in Europe such as Google, Microsoft, Meta and TikTok. Post-merger, we rank among the top five parties in Northern Europe for managed spend (+100 M) with Google, reflecting our significant capabilities and strategic importance in the region

Impact of This Deal on Direct Stakeholders
For the direct stakeholders – employees, clients and suppliers– the deal brings several benefits:

• Employees benefit from working for a larger, more robust organization that offers greater opportunities for career growth and professional development, also having flexibility to work from various locations.
• Clients benefit from a broader range of services, enhanced by deeper expertise and access to the latest innovations (aces to Beta’s) and best talent in performance marketing.
• Suppliers (partners such as Google, Meta, TikTok) benefit as the traditional tech companies are moving towards fewer partners and focusing on serving only a select few large clients.

Impact of This Deal on Society
For society, the deal will contribute to job creation and talent development in the digital marketing sector. By expanding its capabilities, EPAG will foster innovation in marketing, particularly in response to EU regulations on data privacy, which will necessitate new approaches in performance marketing.

Most Complex Aspect of This Deal
Pre-deal – The most complex aspect of the deal was managing four separate acquisition processes simultaneously. Each company had its own ownership structure, operational framework and cultural identity. Mark van Hattum was selling his own business while at the same time having buy-side conversations (together with the NewPort team) with potential targets. This was challenging at times, given the various interest at play and information synergies that are still applicable at various stages in an M&A process.

In addition, a deal with four companies who regularly encounter each other at events and pitches for the same clients added even more complexity on the seller’s side due to potential risks of reputational damage and confidentiality issues.

Post-deal – The post-merger integration of services, teams and processes of four separate businesses required careful planning and execution. Given this complexity, a post-merger integration expert was involved pre-closing and became part of the management team for a limited amount of time to ensure a ‘smooth’ integration as of day-1.