Review: Acamar Films EIS
Bing, the little bunny who stars in the eponymous top-rated BBC CBeebies children’s show, is back.
The first EIS offer through Wealth Club, almost exactly a year ago, was overfunded in record time – it raised more than £3 million in just 34 days.
Now, Acamar – the independent production company behind Bing’s success – is launching a new EIS round. Acamar aims to raise just under £2.5 million and targets core case returns of 3.2x after tax relief – not guaranteed.
- Further opportunity to invest in Bing, the number-one rated pre-school show on BBC’s CBeebies
- Last stage of planned £12 million fundraise first announced in 2018
- Potential to be a global brand – currently broadcast in 117 territories
- The CEO and his family have historically invested over £9 million over 10 years and committed more to this round
- Proven, successful business but unusually still privately owned
- Few assets of this calibre available in children’s IP sector
- Attractive structure – 60% share premium on non-voting EIS shares
- Core case target returns 3.2x after tax relief – not guaranteed
- Single company private offer – no diversification
- Minimum investment £20,000
This is an opportunity to invest in Acamar Films EIS – the company behind Bing, the BBC CBeebies number one preschool children’s show.
Bing is a bunny – a loveable and authentic three-year-old, who entered the lives of British toddlers in 2014, courtesy of CBeebies, the BBC channel for pre-schoolers. Just five years later, Bing is the number-one rated preschool show and most successful programme in the channel’s digital history. It was one of the top 10 most downloaded programmes on the BBC iPlayer during 2018 – the only children’s programme on the list, the only programme not aired first in 2018, and impressively ahead of the England v Sweden football World Cup quarter final.
Internationally, the show is currently available in 117 territories and has 60 signed licensing deals in several countries across multiple product categories.
Online, Bing’s popularity is impressive: over 265 million requests on the BBC iPlayer and over 510 million views of Bing content on YouTube internationally since 2017, with 48.9 million views in March 2019 alone. Bing social channels reach 1.5 million fans every month on average.
Unusually for the sector, Bing is still independently owned. Acamar acquired the rights to Bing in 2005. It still has full control of its IP and entitlement to the vast majority of revenues (96% before recoupment of Acamar’s project equity).
The journey so far has been largely financed by Acamar’s CEO and his family, who have invested more than £9 million over ten years and 278 individual equity investors.
Wealth Club has been supporting Acamar’s EIS fundraising activities since last year. The first EIS offer exclusively available through Wealth Club launched almost exactly a year ago and was overfunded, raising more than £3 million in 34 days. Since then Wealth Club has supported a subsequent EIS round (November 2018) and a rights issue (February 2019), helping raise a further £2.1 million. At each funding round the Company has demonstrated significant progress.
Now, to help support Bing’s growth, as planned, Acamar is launching its latest EIS round, exclusively through Wealth Club. It aims to raise £2,465,000 by issuing 493,000 EIS-compliant B Investor Premium NV shares at £5 per share. This represents a pre-money equity valuation of £52.5 million.
Broadcasting and digital
- Fourth series (an additional 26 episodes) is being finalised and scheduled to be aired in the autumn
- Currently broadcast in 117 territories. Launch in Italy in February 2018 has proven a huge success. Bing is also now being broadcast in Russia on Carousel, one of the country’s strongest children’s channels. Additional platform broadcasting deals have been signed in Poland and Italy, and negotiations are taking place to launch in China and Japan.
- Negotiations continue with a major children’s television partner to secure a media broadcast deal in the US, considered the world’s most lucrative market for children’s IP.
- Plans have accelerated to develop a new proprietary mobile app, “Bing World”. It is expected to launch in the UK this Autumn, internationally thereafter.
- Bing's recently launched YouTube channel already has over 400,000 subscribers, with over 510 million views – 48.9 million views in March 2019 alone.
- Gross revenues for Q1 2019 are 397% higher than the equivalent period in the previous year.
Please note, past performance is not a guide to the future.
- 60 licensing deals on Bing, active in multiple territories across several product categories, including clothing, magazines, book-publishing, toys, puzzles & games, experiential licenses (live theatre shows / character meet-&-greets), cinema screenings and DVDs.
- Aim to reach 100 licensing deals by September 2019.
- Award-winning toy manufacturing company Golden Bear, newly appointed as the master toy licensee for Bing for Europe, the Middle East and Australia is scheduled to release a new toy range in summer 2019. Additional licensing partners include HarperCollins Publishers (publishing), Ravensburger AG (games), Rainbow Productions (character costumes/mascots) and StudioCanal (home entertainment).
- Cinema debut in 88 Vue cinemas (30,000 ticket sales). Based on this success it is now being launched in Poland, with Italy and the Netherlands to follow early next year.
- In November 2019, three new Christmas-themed episodes of Bing will be launched exclusively at Vue cinemas before their official UK broadcast on the BBC.
- The ‘Bing Live Show’, Bing’s first stage show, launched in June 2018. It has sold over 100,000 tickets to date and continues to attract audiences across the UK.
Target returns and valuation
Based on previous acquisitions within this sector, valuations seem to have little reflection on financial performance. They tend instead to be driven by the appeal of a concept that can be fitted into the acquirer’s existing distribution network and the potential to exploit its popularity. So, we believe the valuation for Acamar would not be predicated on a multiple of its current profits, but instead on what the brand could be worth to the acquirer.
Potential target returns are covered in more detail in the Research Report and Information Memorandum. The board is confident that the company could achieve a valuation of £75 million or greater on exit (not guaranteed). This could give investors a return of 3.2x after tax relief. If the high case is achieved, the value could increase exponentially, and so could investor returns, but this is in no way guaranteed.
Even on an equity value of £35 million on exit, investors could get a positive return due to the 60% share premium, although there are no guarantees.
Remember, returns are not guaranteed and capital is at risk. Tax rules can change and benefits depend on circumstances.
The team is led by CEO and founder Mikael Shields. Over a period of 30 years, Mikael has established an international reputation for identifying, developing and producing a wide range of hit film and television projects including Nick Park’s Oscar-winning Wallace & Gromit, the global phenomenon that is Pingu, BAFTA-winning Hilltop Hospital, the multi-award winning Flatworld and Aardman Animation’s Rex The Runt.
As with all EIS companies, if it is successful there is the option of a trade sale, a sale to another investor, refinancing or a stock market listing.
Finding a strategic partner to take Bing global is an option the management is actively considering. Bing is already one of the most successful independent pre-schooler brands and could be a highly attractive target if it continues to be successful. Exit options and timeframes are not guaranteed. Note if the investment did achieve an early exit, this could affect EIS tax relief.
Risks – important
This, like all investments available through Wealth Club, is only for experienced investors happy to make their own investment decisions without advice.
EIS / SEIS investments are high-risk so should only form part of a balanced portfolio and you should not invest money you cannot afford to lose. They also tend to be illiquid and hard to sell and value. Before you invest, please carefully read the Risks and Commitments and the offer documents to ensure you fully understand the risks.
This is a single company EIS offer with no diversification. It involves investing in an early-stage business which is by nature high risk and prone to failure.
The value of tax benefits depends on circumstances and tax rules can change.
Fees and charges
Investors are investing in the Company directly so will pay no direct initial or ongoing charges. Acamar will pay an introducer fee to Wealth Club of 6% of funds raised. There is a performance fee of 10% on returns over 1.4x before tax relief. This performance fee is paid out of proceeds due to the investor on exit (e.g. Company sale). Please note that Acamar will facilitate the payment of the performance fee to Wealth Club on exit.
In our view, this is a commercially compelling, highly attractive opportunity to invest in a hit show, proven business and brand that’s already demonstrated its global potential. There are not many EIS-qualifying opportunities like this around.
The level of commitment from the CEO and his family is rare and we believe leaves no doubt as to their passion and determination to make Bing a success. It also means the Company has retained its independence and full control over its IP and rights over the vast majority of its revenues. If a successful exit is achieved, this strategy should enhance shareholder returns. In reality few children’s characters go on to become global icons. The Company’s plans are ambitious. Experienced investors should form their own view as to whether the Company can achieve its plans.
The capital structure is attractive for EIS investors, as they get priority return on their capital plus a share premium of 60%. Future EIS rounds remain uncertain if the Company successfully raises debt through loan notes.
If Acamar manages to achieve its plans, we believe it could exceed its core forecasts and therefore potentially deliver remarkable returns to experienced investors, although there are no guarantees.
Reserve now – no obligation
Wealth Club aims to make it easier for experienced investors to find information on – and apply for – tax-efficient investments. You should base your investment decision on the provider's documents and ensure you have read and fully understand them before investing. This review is a marketing communication. It is not advice or a personal or research recommendation to buy the investment mentioned. It does not satisfy legal requirements promoting investment research independence and is thus not subject to prohibitions on dealing ahead of its dissemination.
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