European entertainment network RTL Group is to acquire a controlling stake in StyleHaul – the leading multi-channel network on YouTube for fashion, beauty and lifestyle – for $107 million (€85m), valuing the company at $151.4 million. In addition, the parties have agreed to earn-out mechanisms that might increase the initial consideration, subject to the future performance of the business. RTL Group will also invest $20 million into StyleHaul in order to fund the company’s growth plan.
This transaction, which is expected to close by the end of November 2014, will increase RTL Group’s shareholding from 22.3 per cent to 93.6 per cent (on a fully diluted basis). Under the terms of the deal, RTL Group has the opportunity to acquire the remaining equity, owned by StyleHaul’s management and employees.
With this agreement, RTL Group further accelerates its rapidly growing presence in the online video space and its position in North America – the largest and most innovative media market worldwide. For the full year 2014, RTL Group expects to more than double its online video views to around 40 billion.
In a joint statement, Anke Schäferkordt and Guillaume de Posch, Co-CEOs of RTL Group, described the acquisition of StyleHaul as “another major strategic step” in developing RTL Group into a global powerhouse in the rapidly growing market for online video. “StyleHaul has a first-class management team that built up the only multi-channel network of scale with a clear focus on the fashion and beauty segment, and has a highly engaged audience – a very compelling proposition for major brand advertisers. StyleHaul is an excellent fit with our digital portfolio, complementing our recent, technology-focused acquisitions BroadbandTV and SpotXchange. With its strong advertising sales team, impressive track record in producing web content and the synergy potential with RTL Group’s broadcasters and producers, StyleHaul has the ideal foundations for continued strong growth,” they suggested.
Stephanie Horbaczewski, Founder and CEO of StyleHaul, said that for the past two years, the partnership between StyleHaul and RTL Group had played an integral role in its success and growth. “We are thrilled to be deepening that relationship and play a significant role in their emergence as a leader in the digital landscape. We are very thankful for all the support we received from my co-founders Allen and Aaron DeBevoise and our other investors RezVen and Bertelsmann Digital Media Investments (BDMI). This opportunity allows the unwavering passion and dedication of the StyleHaul team and ground-breaking community of influencers to accelerate all aspects of our business and we are very excited about what we will accomplish together with RTL Group.”
In 2013, RTL Group made initial investments in StyleHaul resulting in a current 22.3 per cent shareholding in the company (on a fully diluted basis), following a funding round led by Bertelsmann’s digital investment fund BDMI. Since then, StyleHaul has worked closely with RTL Group’s content production arm, FremantleMedia, whose North-American digital studio, Tiny Riot, produces exclusive premium content for StyleHaul, including the talk show The Crew. With more than 4.5 million views to date, The Crew is currently the most-watched original series on StyleHaul.
StyleHaul was founded in 2011 by Horbaczewski, a former Marketing Director at Saks Fifth Avenue, together with Allen and Aaron DeBevoise, the team that founded Machinima. With more than 900 million video views per month, StyleHaul is the leading multi-channel network on Youtube for fashion and beauty and a pioneer in branded content. Revenues are expected to triple in 2014 compared to the previous year.