🤝 Someone Just Bought Daily Hive

This is The Level Ups. Modern business news for the future business leader explained like your friend (not your professor).

Wednesday’s got some big news for Canadian media:

• ZoomerMedia buys Daily Hive

• We break down the whole deal.

Let’s get into it.

Estimated Reading Time: 1 minute & 49 seconds

Daily Hive Sells for 💰💰💰

Daily Hive has been a Canadian media legend for the last 3-4 years, and they’ve been in business since 2008 (was Vancity Buzz back then).

After switching the name and re-branding, the online media group expanded to Calgary, Montreal and Toronto.

As of September 12th, 2022, Daily Hive has been sold to Zoomer Media for a cool $16.4M in total compensation. Amazing news.

You can read all the details here.

BUT, it’s a lot to take in (with small text), so I did the summary for you:

The Numbers:

Details on the sale:

• Sales price: $16.4M

• $6M in cash, $5M on a promissory note (paid later, usually in instalments)

• $3M in ZoomerMedia stock

• Zoomer takes on Daily Hive’s $2.4M debt obligation

Details Daily Hive’s finances (As of June 2022 - their year-end):

• Revenues: $7.5M

• Expenses: $7.2M

• Assets: $2.5M

• Liabilities: $1M

• EBITDA: $625k

EBITDA stands for earnings before interest, taxes, depreciation, and amortization. It’s a form of profits (pretty much the same thing).

It's $625k in EBITDA (profits) and a sales price of $16.4M. That’s ~26x EBITDA. An incredible valuation. The highest I’ve ever seen.

People specializing in buying and selling companies might say it’s “too high,” but they would be wrong.

It’s worth what people pay for it.

Better to focus on the deal's benefits and why the valuation is amazing. Props to the team on getting this deal done.

The Value of a Big Audience:

Influencers got this right. The bigger the audience, the more leverage you have.

While tech stocks are dropping, real estate is having a moment, and crypto’s a 💩 show - media is thriving. Welcome to the attention economy. 

Here’s how it looks now that the deal’s done:

• Zoomer will now be seeing ~685M page views a month.

• Most of this audience is under 45 and “Gen Z.”

• They get Daily Hive’s content creation team, Hive Labs.

• Adding 3.2M followers on social.

This massive group of people see Daily Hive’s content every day. That’s how you get to 26x.

What’s Next?

It's the critical question.

Will it be the classic case of a giant conglomerate “ruining it,” or will the new team pull off an even greater success?

Too soon to tell, but here’s one thing that will happen for sure:

A 26x valuation means people will try to copy what Daily Hive did. Expect many new media companies to pop up. Kinda like me tbh 🙃

Regardless, this is fantastic news for Canadian media.

Congrats to the team!!

Thanks for reading