September 19, 2023 -- InvestorsHub NewsWire -- via NetworkNewsWire
Editorial Coverage: 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 company’s
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.
- Strategic acquisitions prove
that harnessing the power of niche user bases can lead to parabolic
growth
- Lucy Scientific Discovery has
recognized the value of uniquely leveraging user bases to rapidly
amplify shareholder value
- Earlier this year the company
entered into a share purchase agreement to acquire the total IP of
High Times
- Most recently, Lucy announced
the signing of an amalgamation agreement to acquire BlueSky
Wellness, a move that expands its footprint into the growing global
wellness category
Click here to view the custom infographic of
the Lucy Scientific
Discovery editorial.
Headline Makers
Meta’s 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
application’s 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,
Microsoft’s $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 Discovery’s 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. Apple’s 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.
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