U.K. Digital Video Firm Rightster to Buy Base79 for Up to $85 Mil, Adds YouTube Co-Founder Chad Hurley as Investor

Rightster also to acquire social-video specialist Viral Spiral

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Rightster Group, a U.K.-based digital video distribution and ad network, announced plans to acquire British YouTube multichannel network Base79 for up to £50 million ($85 million) — just the latest example of consolidation in the sector.

In addition, publicly held Rightster said Chad Hurley, former CEO and co-founder of YouTube, will invest in the company and will join Rightster’s advisory committee.

Base79’s investors include the Chernin Group, Evolution Media Growth Partners (the investment arm of Evolution Media Capital, partly owned by CAA) and MMC Ventures. The MCN claims to have 1,100 content partners in music, news, sports and entertainment — including Reuters and Simon Cowell’s Syco TV — and an active audience across all channels of more than 35 million subscribers.

Also Tuesday, Rightster announced the acquisition of Viral Spiral, a social-video specialist, for up to £4.1 million (about $7 million) in cash and stock. Rightster is offering 75 million shares to raise £42 million ($72 million) to fund the acquisitions.

By buying Base79 and Viral Spiral, Rightster will more than double the number of content partners on its video-distribution platform and boost its monthly views from 371 million to more than 1 billion. After the deals close, Rightster expects to rank as the fourth-biggest YouTube MCN by audience in North America and the No. 1 MCN outside of North America.

“Importantly, this greater scale and expertise improves the service we will be able to offer creators and publishers, improving our ability to both grow audiences and increase monetisation and positions us as a global leader in the exploding online-video market for brands and media agencies,” Rightster founder and CEO Charlie Muirhead said in announcing the deals.

The deals also bring Rightster executive talent, with the company calling out the addition of Base79 chief content officer Patrick Walker, who was previously senior director of content partnerships for YouTube’s Europe, Middle East and Africa region.

Ashley MacKenzie, founder and CEO of Base79, said in a statement provided by Rightster: “I am delighted that Base79 will now be able to offer an expanded range of services and support to both current and future customers. By joining forces with Rightster, we will be able to bring the expertise and industry relationships of the combined group across the world.”

Base79, founded in 2007, last year generated £9.62 million ($16.5 million) of gross revenue and posted a loss before taxes of approximately £3.74 million ($6.4 million). The company has about 60 employees.

London-based Rightster, founded in May 2011 by CEO Charles Muirhead, currently runs a network with more than 850 content owners and over 7,500 publishers. The company has 183 employees in 10 offices.