(01)EngagementOverview
Strategic buyer acquires Megaphone for growth.
Founded in 2013, Megaphone is a performance-driven digital agency that specializes in paid social media and search engine marketing, primarily for B2C e-commerce businesses. The agency focuses on creating tailored digital strategies, leveraging a combination of social media ads, Google ads, email marketing, SEO, video content, and influencer marketing. With 95% of its revenue coming from long-term retainers, Megaphone maintains a high level of customer loyalty with an average monthly retainer size of $4,300. The agency serves over 230 active clients, with an impressive 96% client retention rate. Headquartered in Australia, Megaphone’s expertise in paid social and its strong company culture has propelled it to win the 2022 Marketing Agency of the Year award. As the agency continues its rapid growth, it seeks a strategic partner to scale its operations and expand into new geographies.
(Details)
- Engagement Sell-Side Representation
- Type Full Sale
- Category Digital Product & Web Development, SEO, Paid Media & Lead Generation
- Buyer Type Strategic Acquirer
- Deal Size $10M-25M
- Services Valuation & Market Positioning, Buyer Targeting & Outreach, Offer & Negotiation Support, Due Diligence Management, Closing & Transition Support
(02)Inside TheEnterprise
Who Is Megaphone?
Megaphone is a leading digital agency in the APAC region, providing comprehensive social media advertising and search engine marketing services to e-commerce businesses. The agency is well-known for its innovative and data-driven approach to social media marketing, which delivers an average return of $12 for every $1 spent. Megaphone is also recognized as Australia’s #1 TikTok Agency, and its expertise in creating engaging and sales-driven TikTok content has driven substantial growth for its clients. Beyond social media ads, the agency offers a full range of services, including SEO, email marketing, and video content. With a team of 70+ employees, Megaphone has earned a reputation for delivering outstanding results and exceptional customer service. The agency’s 95% retainer-based revenue model ensures stable, recurring income, with a client base that includes leading brands across various sectors, predominantly in the e-commerce and professional services industries.
(03)Founder'sMotive
The Why Behind The Sale
The founders of Megaphone are seeking a strategic partner to help expand the agency’s reach beyond the APAC region. With a proven track record of success and strong relationships with large, B2C e-commerce clients, the agency is primed for further growth. The founders are looking for a partner who can provide additional resources and expertise to scale operations while maintaining the agency’s commitment to high-quality service and company culture. This partnership would also allow the founders to transition out of day-to-day operations while ensuring Megaphone’s continued success.
(04)Founder’s Vision
Criteria for the Perfect Acquisition Fit
The ideal acquisition partner for Megaphone is one with a deep understanding of performance marketing, particularly in social media advertising and SEO. The buyer should be able to scale the agency’s existing services while leveraging its strong brand and market position. The founders are looking for a partner who shares their commitment to maintaining a high level of customer service and strong company culture. In addition, the right partner would have the resources to expand Megaphone’s services into new geographic markets and help the agency grow its presence in international markets outside of APAC.
(05)Setting the Stage
Preparing Megaphone for Acquisition
Megaphone’s 95% retainer-based revenue model and impressive client retention rate made it an attractive acquisition target. Merge emphasized the agency’s strong financials, high profit margins, and steady growth, positioning Megaphone as a high-growth, stable investment. The agency’s exceptional customer service and its recognition as Australia’s #1 TikTok agency further reinforced its value. With a skilled and experienced team and a proven track record of delivering high ROI for clients, Megaphone was ready to scale to the next level with the right strategic partner.
(06)Attracting Suitors
Strategic Marketing of Megaphone for Acquisition
Merge showcased Megaphone’s high retention rate, impressive client roster, and expertise in performance marketing to attract potential buyers. The agency’s strong reputation in social media marketing, particularly TikTok, made it an appealing acquisition target for firms looking to expand in the B2C and e-commerce sectors. Merge focused on Megaphone’s growth potential, both in terms of expanding its service offerings and entering new geographic markets. Multiple buyers expressed interest in acquiring the agency, recognizing its potential for further expansion and scalability.
(07)Sealing the Deal
Perfect Matchmaking with the Ideal Buyer
The acquisition of Megaphone by Pixis was a strategic move that benefited both parties. Pixis, an AI-driven marketing platform, recognized the value of Megaphone’s expertise in social media marketing, paid ads, and SEO, as well as its strong presence in the APAC region. By acquiring Megaphone, Pixis expanded its capabilities in performance-driven digital marketing while leveraging the agency’s high client retention and proven success with B2C e-commerce brands. The acquisition provided Megaphone with the resources and technology to scale into new markets, enhance its service offerings, and strengthen its reputation as a leading digital agency. The cultural fit between the two companies made the transition seamless, ensuring continuity for clients and employees while accelerating Megaphone’s growth on a global scale.
(08)Unlocking Synergies
Positive Impacts Post-Transaction
Following the acquisition, Megaphone has successfully expanded its services and increased its revenue. The addition of new resources and expertise has allowed the agency to scale operations and enhance its service offerings, including SEO, email marketing, and paid media. The buyer’s support has enabled Megaphone to expand its reach into new geographic markets, particularly in the US and Europe. The combined entity has strengthened relationships with existing clients and attracted new clients, contributing to the agency’s overall growth.
(09)Finding a New Home
The Merge Difference
Merge played a key role in facilitating the acquisition of Megaphone, ensuring that the transaction aligned with both the founders’ goals and the buyer’s strategy. Through careful positioning and strategic marketing, Merge helped identify the ideal buyer who could scale Megaphone’s operations and expand its reach. The acquisition process was seamless, and Merge’s involvement ensured that the agency found a new home where it could continue its growth while preserving its core strengths and company culture.