SG Company, one of the leading players in the Entertainment & Communication sector in Italy and listed on the Euronext Growth Milan market (ticker: SGC), announced the signing of a binding agreement to acquire 52.5% of the share capital of KNOBS S.r.l.. The transaction is expected to close on 29 July 2024. This agreement represents a significant step forward for SG Company, expanding its expertise and presence in the field of web3 and blockchain solutions.
The details of the operation
The acquisition is structured in two phases: initially, SG Company will acquire 51% of the shares of KNOBS for €1,061,600. Subsequently, by 31 January 2026, the company will acquire a further 1.5%. The price for the additional stake will be subject to an Earn-Out clause, which provides for a price supplement if the average EBITDA of KNOBS between 2024 and 2029 exceeds €270,000 or if some of KNOBS’s stakes are sold to third parties, which could increase the value by 25%. At the same time as the acquisition, SG Company will subscribe for a capital increase of €500,000 in KNOBS, increasing its stake to 36.8 per cent. In addition, Smart Capital will sell an additional 14.2 per cent of the share capital of KNOBS to SG Company for €561,600, bringing SG Company’s total stake to 51 per cent.
Smart Capital’s entry into SG Company
The transaction also includes a capital increase of SG Company reserved for Smart Capital in the amount of €738,600, through the issuance of 1,846,500 new ordinary shares at a price of €0.40 each, with the issuance of associated warrants. This entry consolidates Smart Capital as a stable, long-term investor with a 24-month lock-up, highlighting its confidence in SG Company’s growth potential.
KNOBS: An innovative tech company
Founded in 2014, KNOBS S.r.l. is an innovative SME specialising in web3 and blockchain solutions. Thanks to a team composed of university professors, researchers and industry specialists, KNOBS stands out for its ability to offer consulting services, design and implementation of complex software solutions. The company collaborates with the Politecnico di Milano and theBlockchain & Web3 Observatory to promote the adoption of blockchain technology as a growth driver. KNOBS has a diversified client portfolio that includes technology startups and large corporations in the Automotive, Media & Entertainment, Telecommunication and Utility sectors. As of 31 December 2023, KNOBS reported revenue of €1,395,249, EBITDA of €206,382, net financial position of €-299,577 and profit of €-68,369.
Strategic implications for SG Company
The acquisition of KNOBS is an integral part of SG Company’s 2024-2026 Business Plan, published in February 2024, which aims to strengthen expansion in the digital innovation sector. This transaction will enable SG Company to integrate KNOBS’s activities into its services, improving efficiency and market attractiveness. Moreover, it will create significant synergies with the other companies of the group, such as Sinergie Srl, Louder Srl, Geotag Srl, NET-SG Srl, Mission to Heart S.r.l. and FMA Srl.
The new advisory board
Following the acquisition, KNOBS co-founders Vincenzo Rana (CEO) and Francesco Bruschi (Chairman) will join SG Company’s advisory board, called Strategy Growth, with an initial commitment of at least three years. This board, established on 6 June 2023, aims to plan, integrate and direct the technological development of SG Company’s business strategies. Vincenzo Rana will assume the role of Innovation Manager.
The declarations
- Andrea Costantini and Andrea Faraggiana, Co-Managing Partners of Smart Capital, commented: “This transaction reinforces our commitment started three years ago with KNOBS. The integration with a larger group such as SG Company will further accelerate the growth of KNOBS.”
- Vincenzo Rana and Francesco Bruschi said: “The synergies with the Group’s companies will allow us to reach new heights, combining our expertise in the blockchain field with SG Company’s strategic vision.” Rana went further by explaining that “the SG Company transaction represents an important step forward in the consolidation of the blockchain and web3 sector. Finally, one of Italy’s leading players in the Entertainment&Communication sector, listed on the Euronext Growth Milan market of Borsa Italiana, demonstrates a concrete commitment to these technologies as engines for business innovation. The entry of KNOBS into the Group will allow it to take full advantage of the benefits offered by blockchain and web3, applying them to the various sectors in which the Group’s companies operate. This will not only enhance SG Company’s technological and innovative capabilities, but also create effective synergies, promoting sustainable growth and strengthening the Group’s competitiveness in the market.”
- Davide Verdesca, CEO & Chairman of SG Company, said: “This operation is strategic for the group, allowing us to once again be the First Mover in the world of communication. KNOBS is a European excellence that integrates perfectly with our other companies, creating additional value for all our products.”
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