The network of corporate M&A teams is not unlimited. Or is it?
A healthy financial position and a clear desire for growth are vital to a company’s M&A strategy. But the scope of the traditional network only stretches so far. Erik Cornelissen from CLIQ Digital explains how he has found a way to spot interesting acquisition candidates outside of the ‘classic’ corporate network.
A clear growth strategy
CLIQ Digital is in a healthy financial position. “Creating reach first and then making money, as Netflix does, just isn’t in our DNA,” says Erik Cornelissen, Director of M&A. “Using our knowledge and experience with mobile entertainment, we have developed a strategy that means we earn back every euro we invest in marketing within six months.”
The packages now offered by CLIQ Digital are aimed at the mass market. In addition to a single content package, CLIQ Digital allows people to take out a multi-content subscription that contains five different types of streaming content: film, audiobooks, music, sports and cloud games. “The average household will pay €80–90 per month on separate subscriptions for all of these services. Our offering reduces the cost considerably.”
M&A strategy: Acting quickly with a healthy financial position as a basis
CLIQ Digital’s M&A strategy is primarily aimed at expanding services in terms of content or geography, but financial growth is always kept in mind. “For us, it always starts with the business,” explains Cornelissen. “We hardly make our own productions, we rather focus on offering content through a service that is cost-effective and connected. This means that we look either for acquisition partners with an existing subscriber base or for those with specific marketing expertise that aligns with our business objectives.”
CLIQ Digital’s healthy financial position and a clear desire for growth are fundamental to its M&A strategy. “If we come across an interesting acquisition candidate, we can act quickly. This gives us an edge over other interested parties,” says Cornelissen.
Meanwhile, the CLIQ Digital M&A team keeps an eye on a number of trends they see in the market, including:
➔ Digital media is for everyone, not just young people. Older audiences are currently changing how they consume entertainment, moving from linear consumption to non-linear consumption
➔ More and more households have multiple streaming subscriptions
➔ Traditional advertising models are being put under pressure unless they are well-targeted. Advertising-based video on demand (AVOD) models are becoming increasingly popular in the United States and Europe
➔ Constant changes within the market are increasing the importance of programmatic M&A
Looking beyond the usual network
The traditional network of classic TV and production companies can be valuable when identifying new initiatives. “My background is in that world,” says Cornelissen. “Part of what we do is based on the classic network and you can see that content-creation companies such as Disney, Warner, Endemol and Talpa can still find each other easily. Yet, we are convinced that there are still many untapped opportunities outside of traditional media. For this reason, we believe it is important to make sure that we broaden our horizons. This is where Dealsuite comes in.”
In addition to network contacts, CLIQ Digital’s M&A team also has its own researchers who actively seek out new opportunities. “We also use Dealsuite to help us – Dealsuite is an extension of our trusted network that we couldn’t do without,” explains Cornelissen. “I receive daily updates from Dealsuite that let me know what is going on. I have also set a pitch so that those who don’t know us yet can see what we are looking for. This means that we have the most complete possible overview of the market, and we can find parties that we might not otherwise have noticed – or at least not as quickly. I noticed that we are being approached for acquisition opportunities more frequently. So Dealsuite is a particularly useful addition, even for businesses.”
Facts and figures: CLIQ Digital CLIQ Digital is a major player in the streaming services sector:
➔ The company operates in more than 30 countries and employs some 130 people of 32 different nationalities
➔ CLIQ Digital’s headquarters are in Düsseldorf and it also has offices in Amsterdam, London, Paris, Barcelona, Toronto and Florida
➔ CLIQ Digital has been listed on the Frankfurt Stock Exchange since 2005 (ISIN DE000A0HHJR3)
➔ CLIQ Digital started off by offering mobile services such as ringtones and games (before the rise of the smartphone)