Melbourne marketing agency Oliver Grace to be acquired by ASX-listed AD1 Holdings for $2m

The $2 million purchase price is split evenly between cash and shares to be paid in tranches, including a final $675,000 earn-out if annual revenue exceeds $2.5 million and EBITDA is 20 per cent of revenue over a 12-month period within four years.

This compares to revenue of $1.5 million in FY24 for Oliver Grace, a business that was founded in 2019 and is now profitable and cash flow positive. Its breadth of expertise ranges from brand strategy and brand refreshes through to content creation, user experience (UX) design and customer experience (CX) strategy.

The agency has more than 150 customers to its name, supported by 10 staff and two offices in Collingwood and the southern Sydney suburb of Miranda. 

Today's announcement is the product of a working relationship over six months after Oliver Grace was engaged by AD1 to review and provide guidance on its brand and positioning strategy, at a time when AD1 Holdings has been through a significant restructure including major cost saving initiatives and the recent impairment and voluntary administration of one of its divisions - Utility Software Services.

The technology group has historically only invested in Software as a Service (SaaS) businesses, and has been on the recovery path over the past 12 months after an FY23 that saw revenue plunge 38 per cent as the company remained in the red. 

Staff retention and productivity platform Art of Mentoring (AoM) is its largest business unit and has 100 programs in 26 countries, but a key point of focus over recent years has been its emerging North American business which has now hit the $1 million annual recurring revenue (ARR) mark, compared to record revenue of $3 million in Australia in FY25. 

AD1 also owns an Australia-centric job board and recruitment platform called ApplyDirect with the NSW and VIC governments as its main customers. In today's announcement the group noted this division saw 60 per cent revenue growth to $1.2 million in FY24.

It is not clear how much of this can be attributed to the brand positioning strategy work that Oliver Grace was engaged in, but AD1 notes that prolonged engagement "highlighted a strong cultural and strategic fit between the two organisations", with both parties gaining deep insights into the services and strategic direction of the other.

AD1's leadership believes there are significant synergistic cost savings and revenue growth opportunities by bringing both businesses together, including new organic revenue opportunities for AoM and ApplyDirect, and a re-positioning and rebranding all external assets with refreshed messaging and educational materials for new and existing customers.

In addition, AD1 sees benefits in reduced external advisor costs by bringing such functions in-house, as well as new and fresh ideas from Oliver Grace's highly experienced staff, adding greater depth to the group's talent pool.

"This is a significant period for the AD1 group and we are excited to consolidate such a successful creative agency into the AD1 group," says AD1 Holdings chief executive officer (CEO) Todd Perkinson.

"The acquisition will create economies of scale within the AD1 corporate services team as Oliver Grace hand over their corporate services roles, allowing them to focus on core business objectives and growth of the business.

"It will also generate cost savings for AD1 as the Oliver Grace team bring a complementary level of skills that the AD1 group were otherwise obtaining from third parties.

"I am excited to have Nick, Bonnie and the wider Oliver Grace joining the AD1 team. I look forward to their imminent delivery of the first phase of our rebranding and repositioning for the group as well as future group objectives."

The acquisition will be underpinned by a $1.6 million capital raise from investors, which has already been successfully completed.