Internet sports entertainment provider Quokka Sports Inc. put up about $130 million in stock Friday to acquire rival Total Sports Inc.
Under the terms of the agreement, Quokka will issue about 15 million shares of common stock for the ownership of privately-held Total Sports. Quokka said it expects the transaction to close in October, subject to various conditions including approval of Quokka and Total Sports stockholders.
The acquisition will double the Quokka Sports Network estimated audience size, the company said. Currently Quokka Sports — which has built a presence in digital sports entertainment through its network of sports verticals, including the Olympics, motorsports, action sports, sailing and the recently announced golf vertical — attracts more than 1.5 million unique visitors per month, according to company estimates. The company said it has a connected time of 36 minutes per unique visitor. Total Sports has taken a more mainstream approach, with a presence in Major League Baseball, NCAA basketball and NCAAfFootball. Total Sports estimates that it also attracts 1.5 million unique visitors per month with a connected time of 10 minutes per unique visitor.
With the acquisition and consequent broader program offering and wider network reach, Quokka said it anticipates increased revenue opportunities from sponsors and advertisers, content distribution and consumer products and services. Quokka said it forecasts revenues of $100 million in 2001 from the combined company, up from $13 million in 1999 and an anticipated $50 million in 2000. Also, Quokka said the addition of Total Sport’s technology and production platform — like its TotalCast System — to its existing infrastructure will allow it to reduce production costs by 30 to 40 percent.
The TotalCast System is designed to effectively manage production of hundreds of concurrent games and events for multiple sports while maintaining bandwidth efficiency. Its publishing system is a scalable template based infrastructure that streamlines the publishing process and integration of content. It also allows for multiple platform content stream output — simultaneously to the Web, Personal Digital Assistants and wireless phones.
“The acquisition of the company will put Quokka Sports in the forefront of the digital sports entertainment industry and takes our company to a new level,” said Al Ramadan, president and chief executive officer of Quokka Sports.
“We are continuing to build momentum in creating a digital sports entertainment network that captures the hearts and minds of sports enthusiasts. The natural synergies with the Total Sports organization make this a tremendous and highly strategic acquisition for our company. This transaction will help make us one of the fastest growing digital content companies in the world today and get us to profitability ahead of current schedule.”
