Independent agency Lionize, which went into administration after a cash flow crunch following a series of client losses during COVID-19 lockdowns, starts again today with a new owner based in New Zealand.
And Mikey Taylor, co-founder and CEO of Lionize, is back managing the new business.
“With Lionize, the agency, we are retaining the name and the brand and we will continue to offer creative and digital media services,” Taylor told AdNews.
Aaron Monks, who was chair of Lionize, is reforming his media agency, 360DMG.
Taylor: “The above the line media that we've been doing we will pass to 360, if it's appropriate.”
The administrators -- PKF partner Simon Thorn and senior manager Senray Loy -- say the sale deal is with the majority shareholder of Playmaker Labs in NZ, described as mobile & web developers, sports & sport data analysts, and video content & social media specialists .
The sale includes the purchase of all business assets including intellectual property, customer listings, plant and equipment.
The Australian entity Playmaker Media Pty Ltd takes over the business effective from today.
The administrators, after urgently assessing the company's operations, decided that a sale of the business as a going concern would be in the best interests of creditors.
Taylor had already been in talks with two interested parties before the appointment of administrators.
“We accepted an offer from the majority shareholder of Playmaker Labs in NZ who is acquiring the business in the name of Playmaker Media Pty Ltd,” the administrators say.
The sale is for S650,000 cash, with $150,000 payable upofront to provide cash flow allowibng the business to trade to the end of 0ctober. The rest is due in six equal monthly instalments starting November 15.
The total value of the deal is estimated at more than $1 million when adding in entitlements for 12 employees, including annual leave and long service leave, and redundancy payments avoided.
Administrators: “The sale agreed will provide an overall benefit to the company that is much greater than the alternative of closing the business and realising the assets in a forced sale or auction scenario.”
Taylor told AdNews: “We've got some really unbelievably supportive and understanding clients and a supportive team of people that have been incredibly adaptable throughout the whole process.
“There's a lot of uncertainty with processes like this. I personally feel very grateful that I've had such a supportive team, supportive clients, and to have the opportunity effectively for a second innings., The administrators, I believe, have done a really good job.
“I think we can hold our heads reasonably high knowing that we're been victims of circumstances but the actual underlying value of the business is good.”
According to the administrators, the factors leading to a working capital deficiency, trading losses and finally voluntary administration:
- Client Mayfair Platinum went into liquidation in 2020 with a debt to Lionize of about $4.1 million.
- Delays in payment of Job Keeper funding during COVID lockdowns.
- Additional borrowings required to meet working capital needs resulting from the COVID lockdowns;
- A circa $8 million client, impacted by the war in Ukraine, halting advertising spend.
- International COVID restrictions impacting stage productions and media works progressing to completion in Australia, resulting in the loss of a $2 million contract.
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