European media conglomerate RTL Group has sold its entire stake in BroadbandTV, the digital media and tech company, for $120 million. RTL’s sale of its holding comes as BBTV launched an initial public offering on the Toronto Stock Exchange, and under which BBTV founder and CEO Shahrzad Rafati (pictured above) has become the controlling stakeholder.
RTL had acquired a 51% stake in Vancouver-based BBTV in 2013 for €27 million (about $32 million) and subsequently invested an additional €19.8 million (about $23 million) in the form of convertible notes. The RTL convertible notes in BroadbandTV have been exchanged for a new promissory note of the newly listed entity BBTV Holdings Inc. (trading under the symbol “BBTV” on the Toronto exchange) with a December 2021 maturity date.
RTL said in a statement, “The sale is consistent with RTL Group’s three-priority strategy — core, growth, alliances and partnerships — which includes continuously reviewing the Group’s portfolio and growing its European digital assets in the areas of streaming, advertising technology and digital video.”
Shares of BBTV Holdings began trading Wednesday on the Toronto Stock Exchange. The company issued an aggregate of 10,775,000 shares at a price of C$16.00 per share, for total gross proceeds of C$172.4 million ($130 million).
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In early trading Wednesday, shares of BBTV were down 4.3%, to C$15.31 per share. [UPDATE: The stock closed down 6.25% on its first day of public trading, to C$15 per share.]
Rafati and other directors of the company took approximately 10% of the IPO shares and collectively own approximately 19% of BBTV’s outstanding subordinate voting shares. Rafati owns approximately 34% of the total equity shares of the company and holds approximately 83% of the total voting power.
“In a world where new platforms continuously emerge and supply and demand for video are rising, content owners need a comprehensive solution to help them navigate the complex and expansive digital video landscape,” Rafati said in a statement. “That’s exactly what we solve for. BBTV is the only provider of end-to-end solutions for content owners of any size to help them build, engage and monetize their audiences.”
Rafati founded BBTV in 2005, and the company is one of the last YouTube-centric multichannel networks (MCNs) still standing as an independent operation. Today BroadbandTV manages, distributes and monetizes content on YouTube and other platforms that reaches a global audience. BBTV’s key revenue streams include ad sales, content management and mobile gaming apps.
BBTV-managed content generates tens of billions of monthly impressions, which the company claims makes it the second-largest distributor of video worldwide in terms of unique viewers following only Google.
In June 2020, BBTV held its rank as No. 2 in unique monthly viewers among digital platforms, with 596 million global users who consumed more than 54 billion minutes of video content during the month, per Comscore data tracking the world’s 12 biggest countries. That’s up from February 2019, when the company had 575 million unique users worldwide who consumed 46.9 billion minutes of video content.
BroadbandTV has 266 full-time employees and counts about 350 staffers overall.
BBTV said the IPO was the largest-ever on the TSX with a sole female founder and CEO. Rafati commented, “We are breaking important new ground and paving the way for countless women and girls who envision a future with more potential to be leaders. I hope they can see themselves in this moment and realize that no achievement is out of reach, no matter what corner of the world you come from.”
BBTV’s IPO is underwritten by a syndicate led by Canaccord Genuity and Scotia Capital as joint active bookrunners and also including CIBC Capital Markets as bookrunner, BMO Capital Markets, Eight Capital, Stifel GMP, Cormark Securities and PI Financial Corp.