Smarter Web Company buys Squarebird: why this £1.69m deal could punch above its weight
The Smarter Web Company has snapped up Bristol-based Squarebird Agency Ltd, a profitable web design and digital marketing shop, for a total net consideration of £1,690,000. The deal blends shares and cash, aligns founders with shareholders, and targets a 3-to-4-year payback profile. For a group intent on scaling recurring revenue and operating cash flow, this is a tidy, on-message acquisition.
Below, I break down the price, structure, valuation, and what to watch next.
Deal terms at a glance
| Total consideration | £1,690,000 |
| Equity element | £675,000 via 1,682,033 new shares at 40.13p (20‑day VWAP) |
| Cash at completion | £270,000 (from Smarter Web Company cash) |
| Cash within 3 months | £340,000 (funded from Squarebird’s own cash reserves) |
| Deferred cash | £405,000 in three equal annual instalments |
| Effective consideration (Company’s view) | ~£1.35m (net of Squarebird’s £340,000 cash) |
| Post‑Admission share count | 351,919,126 |
| Consideration shares as % of post‑Admission | ~0.48% |
Jargon buster: VWAP is the volume‑weighted average price of the shares over a set period. A lock‑up means recipients of new shares cannot sell them for a period – here 12 months, followed by an orderly market arrangement for the next 12 months.
What Smarter Web Company is actually buying
Squarebird is a 20+ person digital agency founded in 2015, now incorporated as Squarebird Agency Ltd (2024) after transferring the trade from Squarebird LLP. It offers complementary services across web design and digital marketing and has a strong client base with approximately 40% recurring revenue over the last five years.
Squarebird’s recent numbers (unaudited)
- 12 months to 30 April 2025: turnover £1,404,831; gross profit £1,281,362; EBITDA £541,516; profit before tax £477,119; profit after tax £355,071; net assets £274,173.
- 9 months to 31 January 2026: turnover £1,086,434; gross profit £973,734; profit before tax £269,070; profit after tax £199,227; net assets £473,400.
EBITDA – earnings before interest, tax, depreciation and amortisation – is a common proxy for operating profitability. On those figures, Squarebird looks profitable, cash‑generative, and margin‑rich for its size.
Valuation: an EBITDA multiple in the Company’s target zone
Smarter Web Company values the deal on EBITDA. Netting off £340,000 that will be funded from Squarebird’s own cash, the effective consideration is about £1.35 million. On the 12‑month EBITDA of £541,516, that implies roughly 2.5x EBITDA.
Taking a more conservative £440,000 EBITDA (management’s illustrative adjustment to reflect incremental costs) puts the multiple near 3x – still squarely inside the stated 3x to 4x acquisition range from the 10 Year Plan. That is a disciplined price for a profitable, recurring‑revenue agency.
Payment structure and alignment
The mix of equity and cash does three useful things:
- Preserves group cash at completion (£270,000 paid up front, with £405,000 deferred across three years).
- Uses Squarebird’s own £340,000 cash reserves towards the consideration, reducing net outlay.
- Aligns founders Jon and Nick Bird via £675,000 in new shares locked for 12 months, then subject to orderly selling for a further 12 months.
Founders are committing to remain for at least three years, and Squarebird will run as a separate business initially. Both parties are Bristol‑based, so expect practical collaboration and cross‑sell opportunities over time.
Strategic fit: recurring revenue, scale and resilience
This acquisition is straight out of the 10 Year Plan playbook: buy profitable, cash‑generative operators with recurring revenue to bolster the core web design and marketing platform. The Board highlights the benefits clearly – more recurring revenue, stronger operating cash flow, and additional profit to support central overhead. That should make the group more resilient through market cycles.
There is also a nod to the Company’s Bitcoin treasury strategy. A steadier base of cash flow and profit provides ballast while the group continues to implement that policy. The RNS reiterates, at length, the risks and the FCA’s stance on cryptoassets. Importantly, the Company stresses that an investment in the shares is not an investment in Bitcoin, though the balance sheet is “materially exposed”.
Share issuance and dilution
The 1,682,033 Consideration Shares will list on the Main Market at or around 08:00 on 26 February 2026, subject to Admission. After Admission, Smarter Web Company will have 351,919,126 ordinary shares in issue. On that base, the consideration shares equate to approximately 0.48% of the enlarged share count – a modest dilution to secure a profitable bolt‑on.
The good, the not‑so‑good, and what to watch
Positives
- Valuation discipline: ~2.5x to ~3x EBITDA is attractive for a proven, profitable agency.
- Healthy recurring revenue: approximately 40% provides visibility and cash flow quality.
- Founder alignment: meaningful equity with a 12‑month lock‑up and continued leadership for at least three years.
- Cash‑light completion: only £270,000 out the door up front from group cash; deferred elements expected to be funded by Squarebird’s operating profits.
- Operational fit: complementary capabilities in the same city, enabling practical collaboration.
Watch‑outs
- Integration execution: while initially separate, realising commercial synergies will take time and focus.
- Deferred consideration risk: three years of staged payments rely on continued performance.
- Bitcoin treasury exposure: clearly disclosed as material and higher risk; market volatility can influence sentiment toward the shares.
- Unaudited financials: the latest figures are unaudited, which is common at this scale but worth noting.
What this could mean for investors
On balance, this is a sensible, value‑driven deal that should lift group earnings quality and cash generation if Squarebird continues to perform. The limited dilution and founder lock‑ups are shareholder‑friendly. If the 3‑to‑4‑year payback materialises, it will validate the acquisition blueprint set out in the 10 Year Plan.
For a business built on client retention and recurring services, adding a profitable, culturally proximate agency is about as clean a bolt‑on as you could wish for. The near‑term focus will be steady integration and maintaining Squarebird’s margins while unlocking cross‑sell opportunities.
Key dates and next steps
- Admission of the Consideration Shares to the Main Market: expected at or around 08:00 on 26 February 2026.
- Cash timetable: £270,000 paid at completion; £340,000 funded from Squarebird cash within 3 months; £405,000 deferred over 3 years.
- Management: founders Jon and Nick Bird to stay for a minimum of three years.
Final take
This acquisition ticks the right strategic boxes at a fair multiple, with sensible safeguards on alignment and cash usage. Execution and the broader crypto treasury backdrop remain the variables, but as a step toward a larger, steadier operating platform, Squarebird looks a well‑judged addition.
Further information
Company website: smarterwebcompany.co.uk
Follow on X: x.com/smarterwebuk
