UTA Buys JUV Consulting, a Gen Z Research and Marketing Agency
RockWater Roundup
RockWater analysis to make you a better investor and operator. Today we discuss UTA’s purchase of JUV Consulting, the likely deal structure, combo logic, and learnings for how UTA is rapidly growing through M&A.
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UTA bought JUV, a Gen Z consulting firm.
It highlights how UTA is rapidly growing their digital practice through M&A.
Let’s break it down…
🎯TARGET: JUV Consulting
- Marketing, creative services, and research agency for targeting Gen Z customers
- “Connects brands with youth culture”
- Founded 2016 by Ziad Ahmed (CEO) when a junior in highschool
- Co-founder Shaina Zafar (CMO) joined in 2018
- Worked with 300+ clients like Lionsgate, Spotify, BET, Google, Instagram, Unilever, Nike, e.l.f.
- Has global network of Gen Zers for surveys, focus groups, field research
- Launched ZCON, a conference with only Gen Z speakers
- TBD # of FT team members, I est < 25 pre acquisition
- TBD 2023 revenue, I estimate low 7 figures
💰BUYER: United Talent Agency (UTA)
- A “global talent, sports, entertainment, and advisory company”
- Founded 1991 by Jeremy Zimmer, Peter Benedek, and Jim Berkus via dual agency merger
- Raised outside PE capital in 2018 to accelerate growth
- Aggressive in M&A: KLUTCH Sports, ELITE Athlete Mgmt, Curtis Brown Group, Echo Location Agency, MediaLink, MediaHound, DBA, others
- In 2022 EQT became UTA’s largest outside investor
- I estimate > 2,000 team members
- TBD 2023 revenue
🤝DEAL DETAILS
- Price and term undisclosed
- Press reports a small “tuck-in” acquisition
🤝DEAL RATIONALE / SYNERGY
- JUV will augment UTA’s marketing and branding capabilities
- Builds upon UTA’s $125M acquisition of MediaLink in 2021, a media and marketing consultancy
- Overall, UTA wants to provide more offerings to brand partners and capture more brand budget
🤝POST-DEAL OPS
- Will become new practice in UTA Entertainment and Culture Marketing Division
- To be rebranded as Next Gen
- “About a dozen” JUV employees incl cofounders will join UTA in LA, NY, Chicago
- Team will report to UTA division co-heads David Anderson and Julian Jacobs
🤔What else I find interesting about deal…
My best guess (since revenue and deal data wasn’t disclosed) is that JUV was doing low 7 figures in revenue per year. There were maybe some recurring client relationships, but likely more 1-off advisory assignments, with monthly retainers in the $5,000 to 20,000 range, and total project sizes of around $20,000 to $50,000. Add in some sponsorships for ZCON.
EBITDA margin was likely in the 10-30% range, depending on how well they managed their cost structure, particularly their global freelance network.
For UTA, the key benefit was acquiring JUV leadership Ziad and Shaina, their top ~10 consultants, and a B2B media business including a podcast / newsletter / ZCON that serves as a client acquisition funnel for the broader set of UTA brand and marketer services.
UTA likely saw all the client relationships JUV built over the years, and believes they could meaningfully grow client budget share by being able to offer a much broader suite of client service offerings like influencer marketing, endorsements, paid media management, and more (aligns with key themes I covered in my 2024 State of Agency M&A report).
And that profit margin will be higher since UTA can provide those services in house instead of JUV previously having to hire outside firms.
Therefore, my guess is the deal structure included a small portion of cash upfront, some upside in building out the new Next Gen practice (earnouts or bonuses for new division revenue targets), and attractive employment agreements requiring a 3 to 5 year commitment.
💭Other quick points…
This kinda feels like Stagwell’s acquisition of Team Epiphany, a “culturalist agency”, which I wrote about here.
With new investor backing from EQT as of 2022, and their recent aggressive M&A track record, it’s clear that UTA is very focused on growing their brand partnership, digital, and sports offerings. Anecdotal industry reports put UTA at the top of the leaderboard for digital and influencer agency and advisory, and they’re working hard to keep it that way, and distance themselves from the rest of the pack.
In JUV co-founder Shaina Zafar’s LinkedIn post about the sale to UTA, she mentioned post acquisition they’ll still be doing thought leadership including The Screenshot weekly newsletter, The Screenshot Podcast, and ZCON, ZCANNES, and ZCONversations. Seems The Screenshot is part of Screenshot Media, which is likely part of JUV, but I can’t confirm the exact relationship
JUV seems to have launched 2 media brands, “just us vibing” which has merch and a podcast, and “coming of rage”, which provides Gen Z POV on social issues like reproductive rights and gun violence. These don’t seem to be a material part of the company business.
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I’m the founder of RockWater Industries. We do financial and strategy advisory for media, agencies, and creator economy. From M&A and fundraising to consumer research and go-to-market planning.
DM me on LinkedIn or email me chris @ wearerockwater dot com
