Reach4Entertainment Enterprises PLC – Renewal of Media Trading Agreements
reach4entertainment enterprises plc (AIM: R4E), the entertainment marketing communications group, is pleased to announce that its subsidiaries, Dewynters Limited and Spot and Company of Manhattan, INC. have renewed their existing media buying agreements with, respectively, Miroma International Limited and Miroma Outcomes LLC. In addition, the media buying agreements have been extended to Agency Press Limited (trading as “Sold Out”) and Wake the Bear Limited), in order to drive additional value to the respective agencies and their client bases.
In their previous form, as announced on 12 February 2018, the Agreements legislated for the provision of media trading services from Miroma to Dewynters and SpotCo for which Dewynters and SpotCo were compensated via a referral fee.
To allow for additional trading opportunities by these parties, each contract has been amended to allow for the provision of Ancillary Services by Dewynters, SpotCo, Sold Out and Wake the Bear to Miroma or its client base (the “Amended Agreements”). These Ancillary Services cover the scope of works that Dewynters, SpotCo, Sold Out and Wake the Bear provide to its core client base today. These services include media planning, media buying, media inventory trading services, creative services content production services, strategy and website design. The Agreements have been amended so that the provision of these services would be based on the respective agency’s rate card, thereby ensuring that Miroma would be dealt with in the same way as any third party client.
Miroma are companies wholly owned by Miroma Holdings Limited, a company of which Marc Boyan, the CEO of r4e, is both a director and the controlling shareholder. The Miroma group operates a successful media buying business which works with brands, media agencies and media owners to enable brand owners to extract additional value from their marketing budgets.
The Amended Agreements and the New Agreements are expected to result in efficiencies in media buying for Dewynters, SpotCo, Sold Out and Wake the Bear, through the expertise and purchasing power of Miroma, for the benefit of r4e and its clients, as well as providing additional referral income for r4e based on its media spend with Miroma. Commission rates paid by Miroma to r4e are calculated on a case by case basis, however any rates applied will always fall within pre-defined parameters, which have been agreed and set by the Board and are based on market rates paid by Miroma to independent third parties. The Amended Agreements and the New Agreements have been entered into on an arm’s-length basis and negotiated and approved by the independent directors of r4e.
The Amended Agreements and the New Agreements will be reviewed annually by the relevant counterparty and will continue unless terminated by either counterparty, providing three months’ notice. The Amended Agreements and the New Agreements will also be reviewed annually by the Directors of r4e that are independent of Marc Boyan.
The entering into of the Amended Agreements by Dewynters, SpotCo and the New Agreements by Sold Out and Wake the Bear constitute related party transactions pursuant to Rule 13 of the AIM Rules for Companies due to Marc Boyan’s interest in Miroma. Accordingly, the independent directors of r4e consider, having consulted with the Company’s nominated adviser, Grant Thornton UK LLP, that the terms of the Amended Agreements and the new Agreements are fair and reasonable insofar as the Company’s shareholders are concerned.