LBG Media acquires social-first creative agency Uncovered Holdings

More importantly, this deal adds capability as well as customers. LBG says the combined production and creative capabilities will create a market-leading content studio with more capacity to deliver larger briefs and longer-term partnerships.

What the Uncovered financials say about the quality of the business

The headline numbers are strong. In the year ended 31 December 2025, Uncovered generated £10.2 million of revenue and £2.7 million of adjusted EBITDA. Adjusted EBITDA is a profit measure that strips out some items to show underlying trading performance.

A margin of approximately 26% is healthy for a creative and agency-style business. Even better, LBG says Uncovered grew revenue by over 80% year on year in 2025 and expects at least 50% revenue growth in 2026 while maintaining similar adjusted EBITDA margins.

That combination – strong growth and solid profitability – is exactly what acquirers want to see. It suggests this is not a rescue job or a speculative tuck-in acquisition. It looks like LBG is buying momentum.

LBG also says the acquisition is expected to deliver significant additional revenue and adjusted EBITDA, and to be double digit EPS accretive in the first full year. EPS accretive means earnings per share should rise after the deal, which is usually a good sign for shareholders.

The deal structure is clever – and slightly unusual in shareholders’ favour

One detail stands out. Although LBG is only buying 75% upfront, the RNS says the minority 25% shareholding will not accrue dividends or rights to further profit distribution, and profits generated from Uncovered will accrue in full to LBG Media.

That is a meaningful point. Normally, if you own 75% of a business, you would expect 25% of the profits to belong economically to the minority holders. Here, LBG seems to have secured full economic benefit from profits while leaving some legal ownership with the remaining shareholders until the put and call options are exercised.

That makes the initial structure more attractive for LBG, though investors should note the exact legal mechanics are not disclosed in the RNS.

The founders are also staying with the business, which is important. In agency acquisitions, client relationships and talent retention matter a lot, so keeping the people who built the company reduces execution risk.

How LBG Media is funding the Uncovered acquisition

LBG has arranged a new facility with HSBC UK Bank plc of up to £50.0 million. That includes a £35.0 million revolving credit facility and an accordion option of up to a further £15.0 million, subject to lender consent. An accordion option is just extra borrowing capacity that can be added later if agreed.

The facilities run for three years to June 2029. For this acquisition, LBG has drawn c.£17 million of debt and used c.£10 million of existing cash, leaving around £10 million of free cash for working capital.

On the positive side, this looks measured rather than reckless. LBG is not emptying the cash drawer and is keeping liquidity on hand. On the less positive side, debt does add financial risk, and the group is clearly signalling it wants firepower for further acquisitions too.

What looks most positive for LBG Media shareholders

• Better revenue mix: LBG wants to reduce exposure to less predictable indirect revenue and increase direct revenue from brands.
• Immediate earnings uplift: management expects double digit EPS accretion in the first full year.
• Strong target economics: Uncovered is profitable, growing quickly and has blue-chip customers.
• Useful strategic fit: LBG brings audience scale, while Uncovered brings more creative and campaign execution capability.
• US upside: LBG says its US presence and Betches relationships can help accelerate Uncovered’s recently launched US operations.

What could worry investors about the Uncovered deal

• Integration risk: creative businesses depend heavily on people and culture. LBG says there is strong alignment, but that still has to be proved in practice.
• Debt has increased: even if borrowing is manageable, it reduces flexibility if trading weakens.
• Future consideration is still open-ended: LBG may pay up to £7.0 million in earnout and may later have to buy the final 25% based on a 9x adjusted EBITDA formula.
• Some details are not disclosed: the RNS does not provide full acquisition-related fees, exact working capital adjustments, or the detailed terms behind the profit entitlement for the minority stake.

My view on LBG Media’s acquisition of Uncovered Holdings

Overall, this looks like a good deal on paper. It strengthens the part of LBG that should be more valuable over time – direct client work, recurring contracts and deeper creative services – while adding a business that already has growth, margins and recognisable customers.

The most encouraging thing is that this is not a vague “synergy” story. The strategic logic is easy to understand. LBG owns attention, Uncovered helps monetise that attention more effectively through direct brand services.

The main watchpoints are debt, execution and how much the final 25% ends up costing if Uncovered keeps growing rapidly. But those are the sort of problems investors can live with if the acquired business continues to perform.

In short, this RNS reads as a serious step in LBG’s move from being mainly a publisher with social reach to being a broader social entertainment and marketing services business. If management delivers, that could make the group’s revenue base more resilient and more valuable.