On 17 May 2019, MGI acquired the majority of ReachHero shares. ReachHero is a Berlin based start
up founded in 2014. It acts as agent for product placement opportunities between brand owners and
influencers operating online video channels. For the purpose of its business activities, ReachHero op
erates a self-owned, highly automated online platform for the brand owners to set up their social mar
keting campaigns, book registered influencer, and analyses the impact and coverage of such influencer marketing activities. Additionally, ReachHero offers agency services, i.e. the client’s entire campaign
can be managed by ReachHero professionals. For deeper insight and enhanced functionality, Reach
Hero recently started offering its customer a software-as-a-service (SaaS) package. ReachHero has over
70,000 registered influencers with more than 750 million subscribers and approximately 1.3 billion
views per month on YouTube. The acquisition of the shares of ReachHero is a business combination
within the meaning of IFRS 3 Business Combinations.
PwC was engaged and prepared an independent purchase price allocation report for identifying ac
quired tangible and intangibles and liabilities of Reachhero. They provide estimates of fair value for
those assets, as defined below, as at 17 May 2019. For the purpose of the purchase price allocation
(PPA), the management provided PwC a business plan of ReachHero which was used by the manage
ment to derive the purchase price offer. The report differentiates between intangible assets and property, plant and equipment. The trademark “ReachHero”, the ReachHero platform, customer relation
ships, influencer network and non-compete agreements were identified as intangible assets and rec
ognised at fair value. Tangible assets like fixed assets and the book value of shares in associated com
panies were identified at book value. Shares in associated companies for Avocado Digital UG was re
duced to nil since no future benefits are expected regarding this shareholding.
ReachHero maintains customer relationships to brand owners, i.e. companies placing influencer mar
keting content for their brands, products etc. via ReachHero. The fair value of the costumer relation
ship amounts to kEUR 591. ReachHero serves as a broker of product placement opportunities between
brand owners and operators of online video channels. For the purposes of its business ReachHero de
veloped an influencer network valued at kEUR 335. A highly automated IT-system in form of an online
marketplace is the ReachHero platform. Brand owners are able to place and manage their influencer
marketing campaigns. For the platform is an amount of kEUR 1,579 recognised.
MGI acquired 67,4% of the shares of ReachHero GmbH. In the course of the transaction, MGI has ac
quired the total amount of shares previously owned by strategic investors and a substantial amount of
the shares owned by the managing directors of the company, i.e. founders. They keep a minority in
terest of 32,6%. The minority interest fair is kEUR 1,679.