On June 9th, 2016, The Marketing Group (TMG), a consumer services-oriented holding firm that consists of mostly Singapore-founded digital businesses – Black Marketing, Creative Insurgence & One9Ninety – (and one UK-based company Nice&Polite) listed on Nasdaq First North, Sweden in a collaborative initial public offering (IPO).
The group (TMG) who entered the market with a new ‘agglomeration’ approach and specialist, scalable growth model, saw its first emission draw an oversubscription of 314 per cent and an enormous volume – 333,000 shares traded on day one – making it among the most successful IPOs on Nasdaq First North Stockholm for 2016.
Commenting on their IPO, Adam Kostyál, senior vice president and head of European listings at Nasdaq, said, “We welcome The Marketing Group to Nasdaq First North. We congratulate The Marketing Group on its listing, and look forward to supporting the company on its journey as publicly traded company.”
According to data from the Nasdaq at the time of publishing, TMG shares are trading in a band between 1.55 euros to 1.62 euros, with a market capitalisation of 23.056 million euros and with 14.41 million shares outstanding.
One9Ninety, which was founded in 2008 by Laurent Verrier and operates in Southeast Asia and China through its Singapore office, is a social and digital media marketing agency and has worked with clients like Yahoo, Volvo, Shiseido, Playboy Fragrances and Adidas.
Black Marketing operates as a boutique B2B marketing consultancy, specialising in social media marketing through LinkedIn where it creates and manages corporate LinkedIn pages and engages in ghost blogging on LinkedIn as part of its B2B content marketing strategies.
Creative Insurgence specialises in lifestyle marketing and works with bars, clubs and restaurants, having worked with brands like the Ministry of Sound, the Pangaea Group and the Massive Collective outlets, as well a managing the brands that include Stella Artois, Jaegermeister and Hoegaarden for the Pacific Beverages group.
2015 saw the firm become an operator when it became the partial owner and exclusive operator of Fashion TV club Singapore, a 10,000 square feet venue with a capacity of 1000 people. This collaborative IPO synchronises with its expansion plans, given that the firm opened a Bangkok office to service the Thai market in Q1 2016.
London-based Nice & Polite is a creative content agency founded in 2011 that provides full in-house media service production for content ranging from film and TV content to album artworks. Clients the firm has worked with include Disney, Glenmorangie, Lego and Louis Vuitton.
In email communication with DEALSTREEETASIA, Callum Laing, a co-founder and director of TMG, shared: “Unity who put this together is headquartered in Singapore as are 3 of the companies in the Marketing Group. However TMG is actually a UK plc that is listed on the Nasdaq OMX in Europe. Shares rose 41% in first 2 days of trading.”
Jeremy Harbour, executive chairman of TMG, believes his new ‘agglomeration’ model is the best approach for small businesses that want to scale but retain control of their individual operations.
Companies are selected to be part of the group but must meet a number of conditions. These include being free of debt, run by leaders in their fields, and have a strong reputation and robust CV. This is aligned with what Harbour says is enabling these businesses owners to keep doing what they do best and function as entrepreneurs.
The three businesses chosen combined an array specialist digital marketing skills, ranging from expert LinkedIn positioning, video content creation, branding, brand activation and high volume lead generation.
Commenting on the IPO, Harbour said, “These small companies are often founded and run by experienced entrepreneurs who have previously worked with giants in the sector. The ability to raise capital or scale quickly is difficult when you are a small business – The Marketing Group provides a platform that allows good businesses to serve more clients.”
Singapore was chosen as the test bed for the agglomeration model and the base for the first phase of businesses to join TMG, due to an environment largely favourable towards entrepreneurship and business in general. Harbour had shared in an official statement: “We look forward to welcoming more companies to the group as we grow and develop our business over the coming months.”
Centrally located in the Indo-Asia Pacific in geographic terms, with strong government support and incentives for enterprises, as well as possessing connectivity to Asian, European and Pacific economies, this creates a supportive market environment. This positioning could see more European firms joining TMG, in a bid to consolidate their resources
“The encouraging Singapore environment and market conditions make it possible for companies to innovate and grow whilst remaining relatively debt free – a perfect storm for the agglomeration approach – and for sparking global market interest.” says Harbour.
In a content piece on Tech in Asia, Laing, who is also a partner in the Unity Group, an M&A firm owned by Harbour that services small and medium enterprises (SMEs) of the main street (<US$5 million in annual revenue) and lower middle market enterprise (US$5-$50 million) categories, shared that the collaborative IPO took a year to organise and execute.
Laing explained: “Most small businesses are too small to benefit from all the advantages you get from being on the public market, so let’s create a collaborative IPO where 20+ small businesses come together to create one big company that lists. By being part of that group, those companies would instantly double, or more, their valuation.”
He continued, “They would be able to bid for much bigger projects by pointing to a $100m balance sheet instead of a $5m balance sheet. And they would have the freedom to sell little bits of stock on the exchange whenever they wanted. Unlike a traditional roll up or M&A strategy, we would leave the founders in place and with full control of their business. Their brands, their budgets, their hiring/ firing decisions. We were building a platform to allow them to scale, but we were giving control to them not taking it.”
In response to queries over the the choice to list in Europe rather than in a Southeast Asian bourse, Laing explained to DEALSTREETASIA in a phone call: “One of our biggest concerns is regarding liquidity, so we need to look at what currencies we’re being traded in, and more people trade in the US dollar and Euro than the Australian or Singapore dollar.”
“Which are the most liquid stock exchanges? The Nasdaq First North in Europe is the most liquid small market in the world. When we approached the listing, we took a global perspective and chose a market that provided the liquidity that the founders were seeking,” he added.