Yospace founders sell to Emap
Yospace Technologies, the user generated content company, has been acquired by media giant Emap for an initial sum of £8.7m, in a deal worth £14.4m in total.
The company, founded in 1999 by David Springall and Tim Sewell, decided to sell to Emap, as it believed it offered the best chance for long-term chance success.
Both Springall and Sewell are to remain with the business for at least the next three years while they work towards a further £5.7m earn-out.
The move towards sale began when the company’s venture capitalist (VC) backer, Parkmead, announced in February last year that it wished to sell all of its technology portfolio companies.
Yospace, which were featured in last year’s GB Young Guns Awards, met with a number of VCs last year, initially with a view to fund a refinancing of the business.
However, following Emap’s announced last autumn that it wished to build a ‘war chest’ of new technology companies, Yospace decided to opt for an outright sale of the business.
The acquisition of Yospace, which had revenues of approximately £2.8m last year, is the first that Emap has made since it announced its desire to develop its digital offering.
Springall told GB that his entire 30-plus workforce have a safe future with the company and that there were no plans to cut staff.
Also, the Yospace brand is likely to be retained by Emap and although an office move is planned this is merely to meet capacity requirements.
He told GB: “The deal is very much about enabling Yospace to develop as a company rather than it being integrated into Emap.
“We think it is a great opportunity for us as about 70% of 16-20 year olds access Emap publications and that is our target audience.”
Springall also told GB that he felt some mixed emotions upon selling the business he founded but overall he was both happy and excited by the deal
“It is still entrepreneurial as it is still a small business, however I won’t have to handle all the things like HR and payroll anymore.
“We are really excited about taking the business to the next stage.”
© Crimson Business Ltd. 2007