Get Cash Back and $0 Commissions
+ The Power of TradeStation
FN Media 19-Sep-2023 9:01 AM
NetworkNewsWire Editorial Coverage
New York, NY - September 19, 2023 In the business world, one of the cardinal reasons for mergers and acquisitions (M&As) is the potential for synergistic growth. Successful companies usually measure this in terms of revenue streams, market share and product offerings. However, in the age of digital technology and globalization, a significant facet of growth potential is often found a companys core customer base and digital reputation. Lucy Scientific Discovery (NASDAQ:LSDI) (Profile) is astutely following this road map utilized by hugely successful corporations by uniquely leveraging user bases to rapidly amplify shareholder value. This well-established, albeit counterintuitive, M&A strategy has been utilized by several major companies including Meta Platforms Inc. (NASDAQ:META), Microsoft Corp (NASDAQ:MSFT), Amazon.com Inc. (NASDAQ:AMZN) and Apple Inc. (NASDAQ:AAPL) with the unconventional process producing results that vastly exceeded expected typical M&A metrics.
Click here to view the custom infographic of the Lucy Scientific Discovery editorial.
Metas strategic acquisition of Instagram in 2012 for $1 billion was less than one week after the roll out of its Android app, when it accumulated more than a million downloads in a day. Then, in 2014, Meta's radar locked onto WhatsApp, boasting more than 200 million users. The acquisition price was steep at $19 billion, but the value wasn't just in the applications functionality -- it was in its colossal global user base.
Microsoft deployed a similar aggressive acquisition strategy of identifying opportunities to diversify and strengthen position and market share by tapping into vast niche user networks. In 2011, Microsofts $8.5 billion acquisition of Skype, a platform with more than 660 million global users, became a classic example of how the tech giant was looking beyond just software integration to a global platform integration strategy. Then, in 2016, Microsoft made headlines again by acquiring LinkedIn for $26.2 billion. LinkedIn, unlike other social media platforms, was the first mover and dominant in the professional networking space.
A Golden Opportunity
These moves by Meta and Microsoft underscore a clear strategy: Harnessing the power of niche user bases can lead to parabolic growth.
Enter Lucy Scientific Discovery (NASDAQ:LSDI), a company that has recognized the value in this counterintuitive approach. Lucy's recent share purchase agreement to acquire the total intellectual property (IP) of High Times shows that the company truly understands the immense value of a large, loyal audience. In an all-stock transaction, the acquisition provides a stream of high-margin licensing and royalty income from the well-regarded High Times. More importantly, with its massive following, the High Times acquisition offers a golden opportunity for Lucy Scientific Discovery to introduce and distribute its products to a captive, engaged audience, while benefitting from significant early-stage revenue.
On closing, Lucy will acquire all the brand rights and fully intends to monetize the broad-based IP through both current and future royalty agreements. Lucy also plans to extend and enhance the existing domestic and international licensing arrangements currently held by High Times, including consumer products and merchandise. The company expects to preserve the core essence of the High Times brands and its followers while simultaneously expanding the follower base and pursuing new avenues of growth and development.
"Lucy expects this acquisition to drive high margin revenue quickly and sustainably," said Richard Nanula, Lucy Scientific Discovery CEO and executive chair. "This is a great opportunity to grow the market presence of the nearly 50-year-old High Times brand globally through licensing and online distribution. We are confident that this opportunity can add significant value for our shareholders."
Lucy Scientific Discoverys move also appears to be a strategic play to leverage an established niche audience for direct product sales, reputation and influence -- just like Meta and Microsoft purchased platforms with vast niche user bases to expand their influence.
The message is clear: Niche user bases are invaluable, as they offer immediate access to engaged consumers, a chance for cross-selling, and opportunities for expansion and diversification. As these cases illustrate, sometimes the most compelling asset isn't a product, patent, or technology--it's the people using them. In the digital age, where user engagement is currency, companies that recognize and act upon this fact will often find themselves in an enviable position of growth and influence.
Testament to Shareholder Commitment
High Times isn't the only M&A move that Lucy Discovery has made. In another all-stock deal, the company continued its savvy strategy with the amalgamation agreement to acquire BlueSky Wellness, a move that quickly expands Lucy's footprint into the growing global wellness category on closing. BlueSky Wellness built an impressive a portfolio of plant-based wellness brands that have generated more than $20 million in each of its last two years that complement High Times' products and platforms and should positively impact the bottom line of Lucy Scientific Discovery.
The addition of the BlueSky portfolio and its team will allow us to capitalize on revenue opportunities," said Nanula. "Coupled with our High Times acquisition, this will strategically position us for substantial near- and long-term growth. The recent announcements are a testament to our commitment to expand and grow our business, adding revenue that diversifies our company and should deliver significant value to our Lucy Scientific shareholders."
BlueSky is led by a team of seasoned CPG executives with experience at Fortune 500 companies, including PepsiCo, SC Johnson, General Mills and Robert Half. They have built and exited a number of successful companies over the last decade. The acquisition brings a unique suite of marketing capabilities, brand-building prowess and a highly skilled team with extensive relationships to the Lucy Discovery table.
Major League Acquisitions
Meta Platforms Inc. (NASDAQ:META) builds technologies that help people connect, find communities, and grow businesses. When Facebook launched in 2004, it changed the way people connect. Apps such as Messenger, Instagram and WhatsApp further empowered billions around the world. Now, Meta is moving beyond 2D screens toward immersive experiences like augmented and virtual reality to help build the next evolution in social technology. The company continues to make key acquisitions that support its strategic business plan.
Microsoft Corp. (NASDAQ:MSFT) enables digital transformation for the era of an intelligent cloud and an intelligent edge. Its mission is to empower every person and every organization on the planet to achieve more. The company has a long history of acquisitions, with more than a hundred acquisitions since 1994.
Amazon.com Inc. (NASDAQ:AMZN) is guided by four principles: customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking. Amazon strives to be the most customer-centric company, best employer, and safest place to work in the world. The company has a rich history of acquisitions; most recently the company added One Medical to its roster of strategic additions.
Apple Inc. (NASDAQ:AAPL) designs, manufactures, and markets smartphones, tablets, personal computers and wearable devices. The company offers software applications and related services, accessories, and third-party digital content. Apples product portfolio includes iPhone, iPad, Mac, iPod, Apple Watch and Apple TV. Earlier this year, the company acquired Mira, a Los Angeles-based AR startup that makes headsets for other companies as well as the U.S. military. Apple typically doesn't discuss acquisitions, but it did confirm the acquisition and issued the statement it traditionally provides when buying a company: "Apple buys smaller technology companies from time to time, and we generally do not discuss our purpose or plans."
Lucy Scientific Discovery's last few weeks action of unconventional strategic acquisitions is a clear indication that the company fully recognizes the inherent value of large and loyal user networks. More importantly than just the inherent value of these networks, the company is fast tracking the integration and expansion of these networks and maximizing revenue streams that will ultimately impact shareholder value. Utilizing part of an unconventional playbook from some major league successful acquisitions, Lucy Scientific Discovery is intent on writing a new chapter of success aimed at benefiting all stakeholders.
For more information about Lucy Scientific Discovery Inc., please visit Lucy Scientific Discovery.
NetworkNewsWire ("NNW") is a specialized communications platform with a focus on financial news and content distribution for private and public companies and the investment community. It is one of 60+ brands within the Dynamic Brand Portfolio @ IBN that delivers: (1) access to a vast network of wire solutions via InvestorWire to efficiently and effectively reach a myriad of target markets, demographics and diverse industries; (2) article and editorial syndication to 5,000+ outlets; (3) enhanced press release enhancement to ensure maximum impact; (4) social media distribution via IBN to millions of social media followers; and (5) a full array of tailored corporate communications solutions. With broad reach and a seasoned team of contributing journalists and writers, NNW is uniquely positioned to best serve private and public companies that want to reach a wide audience of investors, influencers, consumers, journalists and the general public. By cutting through the overload of information in today's market, NNW brings its clients unparalleled recognition and brand awareness. NNW is where breaking news, insightful content and actionable information converge.
For more information, please visit https://www.NetworkNewsWire.com
NetworkNewsWire is powered by IBN
DISCLAIMER: NetworkNewsWire (NNW) is the source of the Article and content set forth above. References to any issuer other than the profiled issuer are intended solely to identify industry participants and do not constitute an endorsement of any issuer and do not constitute a comparison to the profiled issuer. The commentary, views and opinions expressed in this release by NNW are solely those of NNW. Readers of this Article and content agree that they cannot and will not seek to hold liable NNW for any investment decisions by their readers or subscribers. NNW is a news dissemination and financial marketing solutions provider and are NOT registered broker-dealers/analysts/investment advisers, hold no investment licenses and may NOT sell, offer to sell or offer to buy any security.
The Article and content related to the profiled company represent the personal and subjective views of the Author, and are subject to change at any time without notice. The information provided in the Article and the content has been obtained from sources which the Author believes to be reliable. However, the Author has not independently verified or otherwise investigated all such information. None of the Author, NNW, or any of their respective affiliates, guarantee the accuracy or completeness of any such information. This Article and content are not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action; readers are strongly urged to speak with their own investment advisor and review all of the profiled issuer's filings made with the Securities and Exchange Commission before making any investment decisions and should understand the risks associated with an investment in the profiled issuer's securities, including, but not limited to, the complete loss of your investment.
NNW HOLDS NO SHARES OF ANY COMPANY NAMED IN THIS RELEASE.
This release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. "Forward-looking statements" describe future expectations, plans, results, or strategies and are generally preceded by words such as "may", "future", "plan" or "planned", "will" or "should", "expected," "anticipates", "draft", "eventually" or "projected". You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in a company's annual report on Form 10-K or 10-KSB and other filings made by such company with the Securities and Exchange Commission. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements. The forward-looking statements in this release are made as of the date hereof and NNW undertakes no obligation to update such statements.
The post From Instagram to High Times: Unpacking the Power of Vast User Networks appeared first on Financial News Media.