Isentia has settled its legal dispute with rival Meltwater and finalised the closure of King Content, which will see clients and staff transitioned to other areas of the business.
It has also informed shareholders the business expects a 23% decline in profit.
Isentia, formerly known as Media Monitors, revealed it would close the King Content business down due to its poor performance, fold its remnants back into Isentia’s remaining content business and write down its $37.8 million value.
Isentia now moves away from content marketing altogether, choosing to focus on the core operating business of Isentia.
“Our decision regarding King Content has been resolved and management will ensure a smooth and orderly transition for clients and employees,” said CEO John Croll in a statement to the ASX.
iSentia bought King Content in 2015 for $48m, a massive sum which raised eyebrows at the time. Of that, 60% was paid upfront with the remainder dependent on performance. At the time Croll told AdNews he expected King Content to drive double digit revenue growth across the group.
AdNews can confirm King Content will not be sold in this market, despite looking for a buyer for the business in London.
Isentia’s core business is facing its own struggles due to “soft trading” in the first quarter of the financial year. The company expects annual revenues to decline by up to 15% on 2017 to between $133 million and $138 million.
“The decisions by board and management today have been made with the key objective of supporting the core operating business that continues to generate strong recurring cash flows servicing a deep pool of high quality subscription clients across our markets,” Croll says.
“Our sales force reorganisation is delivering good results across client retention, and during a transition year for the business our focus is on initiatives to maintain our market leadership position in business media intelligence and insights.”
Isentia has also reached a confidential settlement with Meltwater, following claims the business was unlawfully using Isentia’s services.
Meltwater, without admitting any further liability, has agreed to permanent orders to restrain them from engaging in conduct which was the subject of Isentia’s claims.
"Today’s settlement is a good outcome and we are pleased that this matter has been successfully concluded," Croll adds.
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